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

Next Year’s Indian Cotton Crop to Remain Flat

August 30, 2016

The Indian cotton crop for the next season beginning in October is expected to remain at the same level as the current year.

International

Indian Cotton Production to Decline

July 14, 2016

The Cotton Advisory Board of India has revised its estimate for this year’s cotton supply and demand situation in India, placing production at its lowest total in five years.

International

New Leadership, Export Program for Indian Textiles

July 6, 2016

India’s textiles industry is benefitting from newly-established leadership and a program designed to increase garment exports.

International

Indian Association Wants Free Trade for Cotton

June 27, 2016

The Cotton Association of India is urging the Government of Pakistan not to support the call for an export ban on cotton by the All Pakistan Textile Mills Association.

International

Update on Indian Cotton Textile Sector

June 15, 2016

By Dr. Seshadri Ramkumar The Indian government implemented its largest ever minimum support price (MSP) scheme through Cotton Corporation of

International

Jack McCarty Named ICAC Researcher of the Year

May 31, 2016

Dr. Jack C. McCarty of Mississippi State University was named Researcher of the Year for 2016 by the International Cotton Advisory Committee.

International

New Cotton Traceability System Reaches Final Testing

May 9, 2016

An inexpensive traceability system to prove the authenticity of organic and other niche cottons could be available by the end of the year, says ICA Bremen.

Around The Gin
Product News

Cotton Board Releases 2015 Annual Report

September 27, 2016

The Cotton Board’s 2015 Annual Report is now available online.

Product News

It’s a Deal: Bayer to Acquire Monsanto

September 14, 2016

Bayer and Monsanto have announced an agreement under which Bayer will acquire Monsanto for approximately $66 billion in an all-cash transaction.

Product News

How Fiber Quality Became So Valuable

September 14, 2016

Textile expert Dean Etheridge explains the meteoric rise of fiber quality on the global market.

Product News

Cotton Cultivated Website Adds Custom Weather Feature

September 1, 2016

Cotton Cultivated – Cotton Incorporated's producer information website – now features a new weather tool tailored for cotton growers.

Product News

ChemChina/Syngenta Deal Gets U.S. Foreign Investment Approval

August 22, 2016

ChemChina and Syngenta have received a key clearance for the proposed consolidation of the companies.

Product News

Enlist Cotton Trait Earns Full Export Approval

August 10, 2016

Cotton varieties containing Dow AgroSciences’ Enlist trait now have full export approval in key countries.

Product News

Spray Equipment Offer Helps Maximize On-Target Applications

August 3, 2016

A new spray technology equipment offer can help growers participating in Roundup Ready PLUS Crop Management Solutions upgrade their sprayers to maximize on-target applications.

Product News

EPA Allows Sale and Use of Existing Belt Inventory

August 2, 2016

The U.S. EPA’s Environmental Appeals Board has upheld an earlier decision to cancel registration for Bayer's insecticide Belt, but is allowing sales of existing stocks to growers for use.

Latest News
International

Next Year’s Indian Cotton Crop to Remain Flat

August 30, 2016

The Indian cotton crop for the next season beginning in October is expected to remain at the same level as the current year.

International

Indian Government to Sell Cotton Stock

July 18, 2016

The Government of India has directed the Cotton Corporation of India to sell its entire cotton balance stock to offset the abnormal price rise.

International

Indian Spinning Association Works to Calm Current Cotton Situation

July 15, 2016

The Southern India Mills’ Association has called for calmness among spinners in India in the wake of the country’s downward cotton production estimate.

International

Indian Cotton Production to Decline

July 14, 2016

The Cotton Advisory Board of India has revised its estimate for this year’s cotton supply and demand situation in India, placing production at its lowest total in five years.

International

New Leadership, Export Program for Indian Textiles

July 6, 2016

India’s textiles industry is benefitting from newly-established leadership and a program designed to increase garment exports.

International

Indian Association Wants Free Trade for Cotton

June 27, 2016

The Cotton Association of India is urging the Government of Pakistan not to support the call for an export ban on cotton by the All Pakistan Textile Mills Association.

International

Update on Indian Cotton Textile Sector

June 15, 2016

By Dr. Seshadri Ramkumar The Indian government implemented its largest ever minimum support price (MSP) scheme through Cotton Corporation of

International

Jack McCarty Named ICAC Researcher of the Year

May 31, 2016

Dr. Jack C. McCarty of Mississippi State University was named Researcher of the Year for 2016 by the International Cotton Advisory Committee.

International

New Cotton Traceability System Reaches Final Testing

May 9, 2016

An inexpensive traceability system to prove the authenticity of organic and other niche cottons could be available by the end of the year, says ICA Bremen.

International

No Export Subsidies for Indian Cotton

April 27, 2016

According to the Government of India, the country is not entitled to export subsidies for its cotton.

International

Little Activity on New World Cotton Contract

April 4, 2016

The ICE Futures world cotton contract is off to a slow start.

International

India Taking Proactive Measures to Combat Whitefly

March 30, 2016

As planting season approaches, the government of India is taking proactive measures to combat likely white fly infestations in the country's cotton-producing Northern States.

International

Better Cotton Initiative Joins ISEAL Alliance

March 24, 2016

The Better Cotton Initiative has been accepted as a full member of the ISEAL Alliance by achieving full compliance with the organization’s standard-setting code.

International

India to Produce Less Cotton This Season

February 29, 2016

India is expected to produce about 3 million bales less cotton for the season ending in September 2016, compared to a year ago.

International

China Losing Top Cotton Importer Status

February 3, 2016

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