WORLD: Record cotton crop to help stocks recover
This year's world cotton crop is set to reach record levels
The US Department of Agriculture (USDA) has lowered its forecasts for US cotton production by 1m bales - but says this year's world crop is still set to be a record and will lead to a rise in global stocks for the first time in four years.
The projection mirrors that from inter-governmental group the International Cotton Advisory Committee (ICAC) earlier this month.
"Exceptional" drought conditions in Texas, the biggest cotton-growing state in the US, are blamed for the drop in US domestic production in 2011.
Despite an estimated 25% rise in planted acreage, harvested area is likely to be down by 10%, USDA says, with as much as 30% of the crop expected to be abandoned. This means US production in the 2011-12 season is now seen at 16m bales - 2.1m bales lower than the previous year.
US cotton demand, meanwhile, is forecast at 15.8m bales.
Globally, however, cotton production in 2011 is now forecast at nearly 123.2m bales, 7.5% above the 2010 estimate.
Record high prices, resulting from very tight stocks at the end of 2010/11 and anticipated shortages, led to increased area in most cotton-producing countries in 2011.
Together, the top five cotton-producing countries account for about 80% of total world production. Shares for China, India, and Pakistan are expected to climb to a combined 57% in 2011, with China - the largest producer - accounting for about 27% of the global crop.
China is forecast to produce 33.0m bales, an 8% rise from a year ago, due to area expansion and improvement in yield. Growth is also seen in India (up 10%) and Pakistan (up 17%) at 27.0m bales and 10.3m bales respectively in 2011/12. A rise of 7% to 4.5m bales is expected in Australia, while cotton production in Brazil is likely to remain unchanged at 9.3m bales.
But the US share of world production is likely to be down as the drought limits US supplies available for export.
Looking ahead, USDA believes world cotton trade in 2011/12 will rebound 8% from the previous year, to 38.3m bales.
China, the world's leading importer, is forecast to import 15.3m bales, up 27% from a year ago and the second highest on record, due to tight beginning stocks, rising consumption, and the government's program to support domestic prices by holding reserves.
Global mill use in 2011/12 is forecast at 116.7m bales, but while this is a rise of 1.6% on the previous year, it is lower than recent forecasts as surplus yarn stocks and a switch to polyester in textile products is expected to reduce demand.
China, the world's top mill user, is expected to consume 46.5m bales in 2011/12, up 1% from a year earlier and continuing to account for 40% of global mill use.
With both producing and consuming countries increasing stocks from the very tight levels held in 2009/10 and 2010/11, world ending stocks in 2011/12 are set to rise 15% to 51.0m bales, USDA believes.
But while the projected global stocks-to-use ratio of 44% reflects this recovery, it is still the third lowest in the last 15 years.
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