Washington, DC (BBN) – World cotton production in 2016/17 is projected to increase by 4.0 per cent, to nearly 23 million tonnes, the International Cotton Advisory Committee (ICAC) said.
“World cotton production in 2016/17 is projected to increase by 4.0 per cent, to just under 23 million tonnes, as the world average yield is anticipated to improve by 4% to 732 kg/ha,” the ICAC said in its latest estimation, released on Friday.
The cotton production is expected to rise 22.95 million tonnes by the end of 2016/17 from 22.03 million tonnes in 2015/16. It was 26.11 million tonees in 2014/15.
In 2016/17, world cotton area is expected to expand by 1.0 per cent to 31.3 million hectares. From December 2015 through February 2016, international cotton prices as measured by the Cotlook A Index averaged 69 cents/lb.
However, prices for competing crops during the same period have fallen, making cotton more competitive this year compared to last.
Cotton planting in Northern Hemisphere countries commences this month.
In 2016/17, India’s area is forecast up 4.0 per cent to 12.4 million hectares due to improved domestic cotton prices in 2015/16. Assuming yield is similar to the four-year average of 522 kg/ha, production could reach 6.5 million tons in 2016/17.
In March, the Chinese government announced a reduced target price for Xinjiang of 18600 yuan/tonne. As a result, area is likely to contract by 10 per cent to 3.1 million hectares and production to decrease to 4.6 million tonnes.
Cotton area in the United States is projected to increase by 2% to 3.3 million hectares and production by 9.0 per cent to 3.1million tonnes.
After production plummeted in 2015/16, cotton production in Pakistan is expected to jump 35 per cent to 2.1 million tonnes as yields recover.
After declining by 2.0 per cent in 2015/16, world cotton consumption is anticipated to remain stable at 23.9 million tonnes.
Consumption in China is projected to decrease by 5.0 per cent to 6.8 million tons due to increasing wages, high domestic cotton prices, and low polyester prices.
In 2016/17, Vietnam’s cotton consumption is forecast to rise 16% to 1.3 million tons, making it the fifth largest consumer.
Consumption in Bangladesh, the sixth largest, could increase by 10 per cent to 1.2 million tons. After several seasons of growth, cotton mill use in India and Pakistan contracted in 2015/16 due to weaker demand.
However, India’s consumption is projected to rise by 4.0 per cent to 5.5 million tonnes, and in Pakistan by 1.0 per cent to 2.2 million tons. After declining by 3.0 per cent in 2015/16, world cotton trade is expected to recover by 1.0 per cent to 7.5 million tons in 2016/17, as consumption grows in import dependent countries.
Vietnam and Bangladesh are likely to be the two largest importers of cotton in 2016/17, with import volumes expected to rise by 25 per cent to 1.4 million tons and by 5.0 per cent to 1.1 million tonnes, respectively.
China could see imports fall by 13 per cent to 936,000 tonnes.
Exports from the United States are projected to increase by 1.0 per cent to 2.2 million tons while exports from India are forecast to decline by 13 per cent to 1.0 million tonnes.
In 2015/16, world ending stocks are expected to shrink by 8.0 per cent to 20.3 million tonnes.
The growth in cotton production while cotton consumption remains stable means that the reduction in stocks in 2016/17 will likely be smaller.
World ending stocks are projected to fall by 5.0 per cent to 19.4 million tones, the ICAC added.