ICAC – Rising Cotton Stocks, Reduced Imports Puts Downward Pressure on Price

Higher ending stocks outside China and lower imports into China will put downward pressure on international prices in 2014/15. Additionally, world production is likely to exceed consumption in 2014/15, though by a lesser amount than in the past four seasons.

As a result, world ending stocks are expected to rise by six percent to 21.4 million tons, and the stock-to-use ratio would be 89 percent, meaning there would be enough cotton stocks to cover consumption for nearly 11 months.

This would be the fifth consecutive season of increase in ending stocks, after a 27 percent fall in 2009/10. China is estimated to hold nearly 60 percent of the world’s stocks, most of which is held in government reserve. At the end of June, the ICAC Secretariat estimates that the Chinese government will still hold 11.7 million tons.

While consumption in China is forecast to grow during next season, a strong preference exists for high quality cotton, making it unlikely that the government will be able to quickly draw down its reserve without offering significant discounts.

At the end of 2013/14, China is forecast to hold 11.5 million tons, an increase of 19 percent from 2012/13, and these stocks are likely to further expand in 2014/15. Additionally, ending stocks outside China are also expected to rise by seven percent, to 8.7 million tons at the end of this season and are projected to reach 9.7 million tons at the end of 2014/15.

In 2014/15, world production is forecast to drop by two percent to 25.3 million tons due to reduced planting in China, where cotton production may reach only six million tons. Production in the rest of the world is expected to increase one percent to 19.3 million tons.

In 2013/14, production in India is estimated at a record 6.5 million tons due to higher yields and better prices, which encouraged farmers to plant more cotton in 2014/15. Assuming yield is similar to the 3-year average, Indian cotton production is projected to reach 6.3 million tons in 2014/15, but this result is highly dependent on the timing of monsoon rains.

The Southwest region of the United States has received much needed rain, which could help reduce the abandonment rate and result in a higher harvested area than last season. In 2014/15, production in the United States is expected to grow 14 percent to 3.2 million tons.

In 2013/14, world consumption grew by less than one percent to 23.4 million tons, but a rise of three percent to 24.1 million tons is anticipated in 2014/15.

The high price of domestic cotton in China, restrictions on imports, difficulties with financing and weak demand for cotton yarn have caused many mills in China to further reduce operations this past season. However, with the ending of China’s reserve policy, many mills are anticipating lower prices later this year, as already reflected in futures markets. Consumption in China should improve slightly and reach 7.9 million tons in 2014/15.

India experienced strong consumption growth in 2013/14, increasing by five percent to 5.1 million tons. In 2014/15, consumption is projected to grow by an additional six percent to 5.4 million tons.

World trade is projected to decline by eight percent to 8.1 million tons, as a result of a reduction in China’s imports from 3 million to 2.2 million tons next season. Imports in the rest of the world are forecast to rise by three percent and reach 5.9 million tons.

Imports into Southeast Asia have grown in line with the expansion of consumption in the region, since little cotton is grown there. In 2014/15, the Secretariat expects imports by Bangladesh to increase by two percent, to nearly 900,000 tons, and those of Vietnam to rise by nine percent, to nearly 700,000 tons.

 

Source – International Cotton Advisory Committee

 

Topics: ,

Leave a Reply

International Stories
International

China Losing Top Cotton Importer Status

February 3, 2016

China has been surpassed by Vietnam as the world’s top cotton importer.

International

Zhangjiagang Becomes First Certified Laboratory in China

November 17, 2015

Zhangjiagang Academy of Inspection and Detection has been certified as a “laboratory of choice” by ICA Bremen.

International

ICAC Cooperative Research Network for Cotton Meets in Egypt

November 3, 2015

Ninety-seven delegates from 10 countries attended the ICAC meeting of the Inter-Regional Cooperative Research Network on Cotton for the Mediterranean and Middle East Regions.

International

Chinese Cotton Demand at All-Time Low

October 16, 2015

Chinese cotton imports reached an all-time low in September, as an economic slowdown and large domestic inventories continue to weigh on demand.

International

Unpicking Cotton?

October 14, 2015

Uzbekistan officials asked local growers to "unpick" some of their harvested cotton. Here's why.

International

ICAC Expects Stable World Cotton Trade in 2015/16

October 5, 2015

The International Cotton Advisory Committee has released its latest projections for world cotton trade.

International

ICA Bremen Brings Cotton Classing Training to Korea

September 30, 2015

ICA Bremen took its Cotton Classing training course to Korea in early September.

Around The Gin
Product News

Brake Herbicide Receives EPA Registration for Cotton

February 12, 2016

The EPA has registered Brake herbicide for pre-emergence use in cotton.

Product News

New FieldView Drive Provides Real Time Field Data Transfer

January 26, 2016

The Climate Corporation is launching FieldView Drive, a device that provides seamless transfer of real time field data and mapping from planting or harvesting equipment to a mobile device.

Product News

PhytoGen Releasing First Enlist Cotton Variety for 2016

January 13, 2016

PhytoGen is releasing PHY 490 W3FE, the first cottonseed variety with the Enlist cotton trait, for the 2016 growing season.

Product News

Enlist Cotton Ready to Launch for 2016

January 6, 2016

Dow AgroSciences announced that cotton growers will have access to the Enlist cotton technology in 2016.

Product News

Bayer Announces New 2016 FiberMax and Stoneville Cotton Varieties

January 5, 2016

Bayer has announced the release of three new FiberMax and Stoneville varieties for 2016, all featuring the company’s GlyTol, LibertyLink and TwinLink technologies.

Product News

Deltapine Announces Class of 16 Varieties

December 14, 2015

Four new Bollgard II XtendFlex cotton varieties make up the recently announced Deltapine Class of 16.

Product News

PhytoGen Varieties Raise Standards for Yield and Quality

November 30, 2015

Growers propelled two PhytoGen brand varieties toward the top of the 2015 USDA Cotton Varieties Planted report.

Product News

2016 Seed Showcase – All-Tex and Dyna-Gro

November 16, 2015

Sister cottonseed companies are working to extend their footprint in 2016.

Latest News
International

China Losing Top Cotton Importer Status

February 3, 2016

China has been surpassed by Vietnam as the world’s top cotton importer.

International

China Considering Sale from Cotton Reserves

January 18, 2016

China’s government is reportedly considering plans to sell some of its cotton stockpile, a move that could move Chinese domestic prices lower and reduce import demand.

International

Zhangjiagang Becomes First Certified Laboratory in China

November 17, 2015

Zhangjiagang Academy of Inspection and Detection has been certified as a “laboratory of choice” by ICA Bremen.

International

ICA Names New President and Directors

November 12, 2015

Jean-Marc Derossis was elected president of the International Cotton Association during the organization’s Annual General Meeting in San Francisco, CA.

International

ICAC Cooperative Research Network for Cotton Meets in Egypt

November 3, 2015

Ninety-seven delegates from 10 countries attended the ICAC meeting of the Inter-Regional Cooperative Research Network on Cotton for the Mediterranean and Middle East Regions.

International

Chinese Cotton Demand at All-Time Low

October 16, 2015

Chinese cotton imports reached an all-time low in September, as an economic slowdown and large domestic inventories continue to weigh on demand.

International

Unpicking Cotton?

October 14, 2015

Uzbekistan officials asked local growers to "unpick" some of their harvested cotton. Here's why.

International

ICAC Expects Stable World Cotton Trade in 2015/16

October 5, 2015

The International Cotton Advisory Committee has released its latest projections for world cotton trade.

International

ICA Bremen Brings Cotton Classing Training to Korea

September 30, 2015

ICA Bremen took its Cotton Classing training course to Korea in early September.

International

U.S. and India Announce Bilateral Collaboration for Technical Textiles

September 25, 2015

Bilateral collaboration and technical exchanges between the United States and India in technical textiles are planned as part of a recently-announced strategic and commercial cooperation between the countries.

International

ICE Futures: World Cotton Contract Begins November 2

September 25, 2015

ICE Futures U.S. will launch a World Cotton contract on November 2, which will trade alongside ICE’s benchmark Cotton No. 2 contract.

International

China ELS Crop Could Triple

August 31, 2015

China’s production of extra-long staple cotton for 2015/16 could be three times the size of last year’s crop, thanks to new incentive programs tied to market prices.

International

First Estimate of New Season Indian Cotton Crop Released

August 25, 2015

The Indian cotton crop for the new season beginning this October is estimated to be 38 million bales (170 kilograms each).

International

Pakistan Taking the Fight to Cotton Leaf Curl Virus

August 19, 2015

Pakistani officials are working to ramp up efforts in the country’s on-going battle with cotton leaf curl virus.

International

Leading Global Economist Set for ICA Trade Event

August 14, 2015

Todd Buchholz, a leading expert on the U.S. and global economy, will share his thoughts on global politics and economics during the International Cotton Association’s (ICA) “San Francisco 2015” trade event in late October.