Interviews
Flat forecast in global 2011/12 cotton consumption
15 Oct '11
5 min read
China has established a program to purchase cotton for its national reserve at a floor price of 19,800 Yuan per ton, or the equivalent of about $1.40 per pound, which is likely to be above the world market-clearing level. It is not yet clear how the Government of China will manage import quotas, in combination with reserve purchases. The Government has a stated objective of supporting prices to farmers, but has been less specific about rebuilding stocks in the national reserve.
USDA's projected increase in imports would allow China to rebuild total ending stocks to about 3.5 months of mill use, sufficient to meet consumption and pipeline requirements at the beginning of 2012/13. To reach USDA's import forecast, the Government of China will need to release some additional import quotas. If the Government wants to retain more cotton in the national reserve, it will need to increase import quotas commensurate with its stock objectives.
Bangladesh is expected to import 3.5 million bales in 2011/12, a 5-percent decline from the previous year and the lowest imports in 5 years, as mills there rely on stocks accumulated in 2010/11. Indonesia and Pakistan are forecast to import nearly 2.3 million bales and 1.5 million bales in 2011/12, an increase of 7 percent and 3 percent, respectively, from the preceding year. Turkey's 2011/12 imports are expected to decline 5 percent from a year ago, to 3.2 million bales. Imports to South Korea are forecast at nearly 1.1 million bales in 2011/12, a 1-percent increase from the previous year.
World 2011/12 mill use is forecast at 114.3 million bales in 2011/12, virtually unchanged from the previous year. This revised cotton consumption forecast comes on the heels of a weakening global economic outlook arising from a slower recovery, as well as elevated fiscal and financial uncertainties in advanced economies. China, the world's top mill user, is forecast to consume 45.5 million bales in 2011/12, a decline of 1 percent from the preceding year, and resulting in one of its lowest global consumption shares in recent years.
Consumption in India and Brazil is forecast unchanged from the previous year at 20.5 million bales and 4.4 million bales, respectively. Pakistan, the world's third-largest mill user, is forecast to consume 10.3 million bales in 2011/12, a marginal increase of less than 1 percent from the preceding year. The United States and Turkey are forecast to consume 3.8 million bales and 5.8 million bales, respectively, down 3 percent from the previous year in the United States, but up 4 percent in Turkey.
Global 2011/12 ending stocks are forecast at nearly 55.0 million bales, up 22 percent from a year ago (fig. 3). Flat world consumption amidst concerns of a lagging economic recovery is expected to drive a significant recovery in ending stocks in 2011/12. The forecast global stocks-to-consumption ratio of 48 percent is marginally above the previous 5-average.
USDA's projected increase in imports would allow China to rebuild total ending stocks to about 3.5 months of mill use, sufficient to meet consumption and pipeline requirements at the beginning of 2012/13. To reach USDA's import forecast, the Government of China will need to release some additional import quotas. If the Government wants to retain more cotton in the national reserve, it will need to increase import quotas commensurate with its stock objectives.
Bangladesh is expected to import 3.5 million bales in 2011/12, a 5-percent decline from the previous year and the lowest imports in 5 years, as mills there rely on stocks accumulated in 2010/11. Indonesia and Pakistan are forecast to import nearly 2.3 million bales and 1.5 million bales in 2011/12, an increase of 7 percent and 3 percent, respectively, from the preceding year. Turkey's 2011/12 imports are expected to decline 5 percent from a year ago, to 3.2 million bales. Imports to South Korea are forecast at nearly 1.1 million bales in 2011/12, a 1-percent increase from the previous year.
World 2011/12 mill use is forecast at 114.3 million bales in 2011/12, virtually unchanged from the previous year. This revised cotton consumption forecast comes on the heels of a weakening global economic outlook arising from a slower recovery, as well as elevated fiscal and financial uncertainties in advanced economies. China, the world's top mill user, is forecast to consume 45.5 million bales in 2011/12, a decline of 1 percent from the preceding year, and resulting in one of its lowest global consumption shares in recent years.
Consumption in India and Brazil is forecast unchanged from the previous year at 20.5 million bales and 4.4 million bales, respectively. Pakistan, the world's third-largest mill user, is forecast to consume 10.3 million bales in 2011/12, a marginal increase of less than 1 percent from the preceding year. The United States and Turkey are forecast to consume 3.8 million bales and 5.8 million bales, respectively, down 3 percent from the previous year in the United States, but up 4 percent in Turkey.
Global 2011/12 ending stocks are forecast at nearly 55.0 million bales, up 22 percent from a year ago (fig. 3). Flat world consumption amidst concerns of a lagging economic recovery is expected to drive a significant recovery in ending stocks in 2011/12. The forecast global stocks-to-consumption ratio of 48 percent is marginally above the previous 5-average.
United States Department of Agriculture (USDA)
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