Cotton stocks outside of China to rise in 2017-18: USDA

2017-18 would be the second year of production growth (nearly 7 percent), alongside the strongest consumption growth since 2012-13 (over 2 percent). Global consumption is expected to remain above production, yielding the third consecutive year of declining global stocks, albeit with a much smaller reduction than in the previous 2 years, the forecast said.

“Stocks in China are forecast to fall substantially for the third consecutive year, with a decline of about 9 million bales, reflecting continued strong and steady State Reserve sales. Despite their aggressive sales and a continuing recovery in consumption, stocks in China will remain very high with the ending stocks-to-use ratio above 100 per cent for the sixth consecutive year,” the report said.

Since China’s policies remain aimed at reducing the State Reserve, its imports will increase only slightly. However, the situation outside of China will be quite different. Production is forecast up in all major producers, resulting in the highest production outside of China in six years. Consumption will grow at a faster rate than within China as well (2.7 percent vs. 1.3 percent).

US cotton will face strong export competition as large Southern hemisphere crops will be available before the 2017-18 US crop. The Franc Zone, Central Asia, and India will have both higher carry-in stocks and larger production. As a result, despite higher exportable US supplies and growing world import demand, US exports are forecast to be lower in 2017-18.

Compared to 2016-17, larger crops are forecast in 2017-18 for the US, India, Pakistan, China, Turkey, and Australia, with only moderate growth in Brazil, Mexico, Egypt, Central Asia, and West Africa. Meanwhile, production declines are anticipated in much of the Middle East and some African countries, such as Chad and Tanzania.

In terms of consumption, strong growth is forecast in 2017-18 for Vietnam, Bangladesh, China, and India, compared to their consumption in 2916-17. More moderate consumption growth is expected in Turkey and Indonesia, as well as some Western Hemisphere countries such as Brazil, Mexico, and the US. Consumption declines are forecast in South Korea, Taiwan, and several consuming countries in the Middle East and Europe. (RKS)

Fibre2Fashion News Desk – India