GLOBAL: Cotton production to shrink further
Cotton production is set to fall by 11% to 23.2m tons in 2013/14, thanks to lower prices and the attractiveness of competing crops, according to the International Cotton Advisory Committee (ICAC).
The organisation's secretariat said the decline would mark the second year running of falling cotton production, and the smallest global output for four years.
The trend will be led by sharply falling production in the US and Turkey, where competition with grains and soybeans is strong, but smaller crops are also forecast in China, Pakistan, Central Asia and Francophone Africa, with India also slightly down.
However, global cotton mill use is expected to show slow continued growth in the same period, rising 3% to 24.2m tons, driven by continued economic recovery and South Asia.
Meanwhile, world cotton trade will be stable at 7.8m tons, with a projected further drop in Chinese imports offset by increased demand elsewhere.
ICAC said that global cotton stocks would contract by about 6% to 15.6m tons between July 2013 and July 2014, with most of the reduction taking place outside China.
But it added that Chinese government policy was a “major source of uncertainty” when it came to short-term global cotton supply and use projections.
The country’s national reserve of cotton now stands at an estimated 7m-plus tons and is likely to continue to grow until March 2013, but the ICAC it was “not clear” what would happen after that point – potentially having an impact on international prices.
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