Washington DC (BBN)- World ending stocks are projected to decrease by 8.0 per cent to 20.4 million tonnes, which represents about 86 per cent of world cotton consumption in 2015/16.
This is the first reduction in world ending stocks since 2009/10, according to the International Cotton Advisory Committee (ICAC).
China’s ending stocks are forecast to decrease by 7.0 per cent to 12 million tonnes, while ending stocks for the rest of the world are expected to decline by 9.0 per cent to 8.4 million tonnes.
However, this reduction in stocks is due toa15 per cent decline in world cotton production, estimated at 22.2 million tonnes, and not to growth in consumption.
In fact, world cotton consumption is projected to decrease by 2.0 per cent to 23.9 million tonnes.
As discussed last month, low prices for polyester, the main competing fiber, have hurt world cotton consumption in 2015/16, the ICAC explained.
Cotton consumption in China, the world’s largest consumer, has declined continuously since 2009/10 when it reached just over 10 million tons.
In 2015/16, cotton consumption in China is forecast at 7.1 million tonnes, down 5.0 per cent from last season. India’s cotton consumption is expected to decline by 2.0 per cent to 5.3 million tonnes.
Cotton consumption in Pakistan is projected to decrease by 12 per cent to 2.2 million tonnes due to weakened demand from China and the low volume of cotton production this season keeping domestic cotton prices firm.
In contrast, consumption in Vietnam may increase by 22 per cent to 1.1 million tonnes in 2015/16 as China continues to invest in spinning mills there.
Bangladesh’s mill use is forecast to expand by 13 per cent to 1.1 million tonnes.
In 2016/17, world cotton consumption is projected to remain stable as modest growth in the top consumers outside of China offsets the decline in China’s cotton consumption.
Aside from Australia where production is forecast to increase by 6.0 per cent to 546,000 tons, cotton production in the top 10 cotton producing countries all declined in 2015/16.
World cotton area contracted by 8.0 per cent to 31.2 million hectares as low cotton prices in 2014/15 and higher prices for competing crops discouraged farmers from planting cotton.
Adverse weather in many countries led to the world average yield decreasing by 7.0 per cent to 711 kg/ha. India’s cotton production fell by 7.0 per cent to just under 6.0 million tonnes.
Production in China decreased for the fourth consecutive season by 20 per cent to 5.2 million tonnes.
A large contraction in cotton area and reduced yields led production in the United States to decrease by 21 per cent to 2.8 million tonnes.
Pakistan’s production is estimated down 34 per cent to 1.5 million tonnes due to pest pressure and inferior inputs lowering yields. In 2016/17, poor returns for competing crops and relatively stable cotton prices may encourage farmers to plant more cotton, and cotton area may expand by 1.0 per cent to 31.9 million hectares.
Modest increases in cotton area in India, Pakistan and the United States are expected to offset losses in China, Brazil and Uzbekistan.
World cotton production is projected to increase by 3.0 per cent to 23 million tonnes in 2016/17.
In 2015/16, world cotton imports are likely to decrease by 3.0 per cent to 7.4 million tonnes with imports by Vietnam, Bangladesh and China all projected at 1.1 million tonnes each.
This represents 44 per cent of world imports. The United States will lead in cotton exports despite reducing export volume by 12 per cent to 2.1 million tonnes.
India’s exports are expected to recover by 22 per cent to 1.1 million tonnes. In 2016/17, world trade may increase 3.0 per cent to 7.6 million tonnes.