More U.S. Acres, Possible Changes in China’s Cotton Policy Will Drive Market in 2014

China Remains a Question Mark

Over the past few months, the market indicated a coming shift in Chinese cotton policy. Although anticipated, the details of any changes are still unclear, leaving cotton’s outlook once again under China’s influence for 2014.

“The one thing we see is that China stands above all others in terms of the question marks that we have,” said Adams. “It has certainly shaped where we’ve been over the last three years, and it continues as we look ahead to 2014.”

Adams pointed out that China – under its current cotton policy – purchased approximately 75 million bales of cotton for their reserves over the past three years, including the country’s internal crop. Although world production of cotton has continued to exceed use outside of China, the Chinese have generally absorbed the excess cotton and helped support prices, which have moved in a sideways range over the past year.

“Because prices have stayed relatively stable, we’re not seeing a signal being sent at this point to countries around the world to really back off of production,” stated Adams.

Adams believes the change in China’s cotton policy will come following the 2014 crop.

“They will be moving toward a target price mechanism,” he reported. “Details have not yet been announced, but it’s been indicated that the target price program will apply only to the western region of their country, which accounts for 60 percent of their production.

“Obviously, there are still many questions to be answered regarding production, what they will do with their reserves and how this will impact the export market.”

The NCC economic outlook report projects China’s cotton production to fall to 30.1 million bales in 2014, down 3 million bales from 2013. Mill use in China should see modest growth to 36.4 million bales, leaving a 6.3 million bale differential with production. But, with nearly 54 million bales currently in reserve, any production shortfall can be easily managed.

“Strictly looking at the balance sheet, China does not need to import any cotton,” said Adams. “However, that is not expected to be the case. China must open 4.1 million bales of import quota at a minimal duty in order to comply with their WTO accession commitments. It is also expected that some amounts of quota for the processing trade will be made available.

“Under these assumptions, the NCC projects China to import 6.4 million bales in the 2014 marketing year, down from 11.0 million bales in 2013. If realized, it would be the smallest level of imports in a dozen years.”

2014 should mark the fifth consecutive year with global cotton production exceeding consumption. But, unlike recent years, world stocks outside of China are expected to increase. Since the U.S. annually exports more than 70 percent of its cotton production, Adams suggests that growers keep an eye on this potential development.

“Smaller imports by China and increased stocks outside of China underscore the very competitive markets facing U.S. cotton,” he stated.

Topics:

Leave a Reply

Cotton Production Stories
Cotton Production

EPA Registers Dicamba Formulation for Use On Dicamba Tolerant Crops

November 9, 2016

The EPA has registered Monsanto's XtendiMax with Vapor Grip technology - a new, low volatility dicamba formulation - for use in weed control programs in cotton and soybean crops engineered for dicamba tolerance.

Harvest

Cotton Looks Promising in Texas’ Rolling and High Plains

October 19, 2016

Good late-summer rains improved conditions for cotton in the Rolling and High Plains regions of Texas and likely mean an above-average crop for 2016.

Harvest

Possible Storm Impact on North Carolina Cotton

October 11, 2016

NC State specialists offer guidelines for making harvest decisions on cotton acres impacted by tropical storm Matthew.

Harvest

2016 Mid-South Defoliation Guide Now Online

September 9, 2016

The 2016 edition of the Mid-South Cotton Defoliation Guide is complete and now available online.

Harvest

Managing Proper Defoliation Timing

September 1, 2016

Proper defoliation planning helps protect yields. But it’s just as important when it comes to maximizing fiber quality.

Harvest

Is Cotton Turning Too Soon?

August 31, 2016

Mid-South cotton normally “turns,” or reaches senescence, during the early weeks of the football season. This year, there are reasons why that change is already appearing before the first kickoff.

Harvest

Harvesting Bottom Line Advantages

August 11, 2016

Options such as co-ownership and sharing of farm equipment are helping provide financial advantages to growers across the country.

Around The Gin
Product News

Valent Introduces Valor EZ Herbicide for 2017

December 1, 2016

Valent has introduced Valor EZ Herbicide as a residual herbicide partner for the new next generation seed systems in cotton and soybeans.

Product News

Wearable Cotton Sensors Developed

November 29, 2016

Conductive cotton fabrics have been developed into flexible wearable sensors, creating new options for cotton textiles.

Product News

Dow AgroSciences, U.S. Farmers Disagree with Proposal to Revoke Chlorpyrifos Tolerances

November 10, 2016

Dow AgroSciences is standing by the safety of proper use of chlorpyrifos, in the face of EPA’s release of a pre-publication copy of the Notice of Data Availability related to its assessment of human health risks associated with the insecticide.

Product News

Advanced Germplasm and Traits Help Growers Thrive in Cotton

November 7, 2016

PhytoGen offers options to improve fiber quality and control weeds, helping growers to out-best their best and thrive in cotton.

Product News

EPA Sets Comment Period for Enlist Duo Label Expansion

November 2, 2016

The U.S. EPA has set a public comment period until December 1 for proposed label amendments for Enlist Duo, which would allow use on Enlist cotton and extend product use on all Enlist crops to 19 other states.

Product News

Helping Cotton Growers Be Good Neighbors

November 1, 2016

Good fences make good neighbors. But these days, on-target herbicide applications also can help make growers good neighbors.

Product News

Americot Offers New XtendFlex Cotton Varieties for 2017

October 28, 2016

In 2017, Americot will offer three new Bollgard II XtendFlex varieties and one new XtendFlex only variety to cotton growers.

Product News

Bayer Delivers Right Combinations for Performance and Profit

October 27, 2016

The extensive economic data documenting earnings from FiberMax and Stoneville varieties helps make the Bayer lineup the first stop for variety decisions.

Latest News
Cotton Production

EPA Registers Dicamba Formulation for Use On Dicamba Tolerant Crops

November 9, 2016

The EPA has registered Monsanto's XtendiMax with Vapor Grip technology - a new, low volatility dicamba formulation - for use in weed control programs in cotton and soybean crops engineered for dicamba tolerance.

Harvest

Cotton Looks Promising in Texas’ Rolling and High Plains

October 19, 2016

Good late-summer rains improved conditions for cotton in the Rolling and High Plains regions of Texas and likely mean an above-average crop for 2016.

Harvest

Possible Storm Impact on North Carolina Cotton

October 11, 2016

NC State specialists offer guidelines for making harvest decisions on cotton acres impacted by tropical storm Matthew.

Planting

Increasing Planter Capacity: Go Faster or Wider?

October 11, 2016

New technologies are giving growers more options to speed up planting. The best solution is the one better suited for your field shape and size.

Harvest

NCC Urges Cotton Quality Maintenance Following Rain Events

October 7, 2016

Growers and ginners are urged to follow proper guidelines to preserve cotton crop quality following Hurricane Matthew and other rain events at harvest.

Harvest

2016 Mid-South Defoliation Guide Now Online

September 9, 2016

The 2016 edition of the Mid-South Cotton Defoliation Guide is complete and now available online.

Harvest

Managing Proper Defoliation Timing

September 1, 2016

Proper defoliation planning helps protect yields. But it’s just as important when it comes to maximizing fiber quality.

Harvest

Is Cotton Turning Too Soon?

August 31, 2016

Mid-South cotton normally “turns,” or reaches senescence, during the early weeks of the football season. This year, there are reasons why that change is already appearing before the first kickoff.

Harvest

Harvesting Bottom Line Advantages

August 11, 2016

Options such as co-ownership and sharing of farm equipment are helping provide financial advantages to growers across the country.

Harvest

Proper Timing of Harvest Aids Focus of New Webcast

July 25, 2016

A new webcast explaining proper timing and use of harvest aids has been added to the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

Cotton Production

Lessons from the 2011 Drought

July 7, 2016

Years of drought in the Southwest have changed the way cotton producers think about water management.

Cotton Production

More Impact on Cotton Yields from Rotation, Cover Crops

July 6, 2016

After eight years of research on cotton crop tillage, Dr. Paul DeLaune is convinced that yields are impacted more by the cover crop and/or rotation.

Production Outlook / Acreage

USDA: 10 Million Cotton Acres Planted in 2016

July 1, 2016

USDA’s first acreage report for 2016 shows that U.S. cotton growers have planted 10 million acres in 2016 – a 17% jump above last year's plantings.

Cotton Production

Managing Texas-Sized Growth

July 1, 2016

When his farm operation suddenly doubled in size, Eric Seidenberger did what he knew best – go for it!

Cotton Production

Texas Cotton Crop a Story of Extremes

June 29, 2016

According to Texas cotton specialists, conditions have gone from one extreme to the other for cotton growers around the state.