Global cotton stocks forecast to fall
02/07/2014
In 2014/15, world production is forecast to drop by 2% to 25.3 million tonnes due to reduced planting in China, where cotton production may reach only 6 million tonnes. Production in the rest of the world is expected to increase by 1% to 19.3 million tonnes.
In 2013/14, production in India is estimated at a record 6.5 million tonnes due to higher yields and better prices, which encouraged farmers to plant more cotton in 2014/15.
China is estimated to hold nearly 60% of the world’s stocks - 11.7 million tonnes - most of which is held in its government reserve.
While consumption in China is forecast to grow during next season, a strong preference exists for high quality cotton, so it is unlikely that the government will be able to quickly draw down its reserve without offering significant discounts, says ICAC.
At the end of 2013/14, China is forecast to hold 11.5 million tonnes, an increase of 19% from 2012/13, and these stocks are likely to further expand in 2014/15.
In 2013/14, world consumption grew by less than 1% to 23.4 million tonnes, but a rise of 3%, 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.
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