Record cotton stocks as synthetic fibres challenge on price
03/03/2015
China’s stocks are expected to remain stable reaching just over 12 million tons in 2014/15, after increasing substantially in each of the three previous seasons, and will account for 56% of total stock. China ended its reserve policy at the start of last year and announced it was limiting imports to the volume required under its World Trade Organisation obligations.
While production has also fallen, the volume has been sufficient to meet 80% to 90% of demand, particularly as China’s consumption has declined the last four seasons. Much of the domestic production was absorbed by China’s national reserve, and spinners relied heavily on imports from other producing countries, allowing international cotton prices to remain elevated.
Turkey is the world’s third largest importer but, like China, imports are expected to decrease in 2014/15. Consumption in Turkey is forecast to fall 4% to 1.3 million tons as mills equipped with old machinery are closed and cotton’s market share declines as a result of the price attractiveness of synthetic fibres.
Imports by Pakistan are forecast to fall 9% to 367,000 tons as the current season’s crop will meet most of its need with imports mostly consisting of longer staple cotton that is not available from domestic producers.
As the world’s largest exporter, the US is affected by the decline in China’s and Turkey’s imports, though demand for high quality machine-picked cotton will help to limit export losses. In 2014/15, production in the United States is estimated at 3.5 million tons, up 25% from 2013/14, and exports are forecast to increase modestly by 2% to 2.3 million.
The International Cotton Advisory Committee is an association of governments of cotton producing and consuming countries.
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