US: Cotton stockpiles seen reaching new record
The US Department of Agriculture (USDA) expects global cotton stockpiles to reach a record high during the current and next year's season, with efforts by China to build its national stockpiles leaving lower inventories for the rest of the world.
The USDA expects stocks to reach 92.74m bales in 2013/2014, a 9.3% rise on the 84.78m bales expected in the current year.
However, this comes as world production is projected to be 3% lower than in 2012/13 at 117.8m bales, as reductions - mainly in the US, China, Turkey, Greece, and Mexico - are partially offset by increases for Brazil, India, Pakistan, and Australia.
The USDA expects world consumption to rise 2% next year due to modest growth in world GDP. But world trade is expected is expected to fall 12% as sharply lower imports by China and India are partially offset by increases for Pakistan, Turkey and Mexico. World ending stocks outside of China are projected to fall nearly 2m bales.
It is forecasting that China's national reserve stocks are currently expected to reach nearly 40m bales at the end of 2012/13.
Based on the Chinese government's current reserve purchase and release prices and import quota policies, USDA projects China will import 12m bales in 2013/14 and will add 10m bales to ending stocks as reserve purchases exceed reserve sales. The resulting projected China ending stocks of 58.2m bales would account for 63% of world stocks.
In the US, production is seen falling by 19% to 14m bales in 2013/14 due to regional average abandonment and yields. Abandonment in the Southwest region is projected at 25% due to continued drought conditions. Exports are expected to fall 13% to 11.5m bales due to the smaller available supply and lower imports by China.
Ending stocks are set to fall to 3m bales, which the USDA said is equal to 20% of total use, and well below the previous 10-year average.
Sectors: Fibres & fabrics
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