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Global cotton production remains above mill use
17
Aug '12
U.S. Department of Agriculture (USDA) reported that world cotton production in 2012/13 is forecast at 114.1 million bales, nearly 300,000 bales above last month—largely the result of the higher U.S. production forecast. 

Higher alternative crop prices this season, coupled with low mill demand for the fiber, reduced global area and thus production (fig. 4). While 2012/13 production is forecast to increase in the United States from last season’s devastating drought, declines in the other major producing countries are reducing the world crop 7 percent below last season’s record of 122.7 million bales to its lowest in three years.
 
In China, the cotton crop is forecast at 31 million bales in 2012/13, 7.5 percent below the estimated 33.5 million produced last season. Planted area is expected to decline 9 percent; however, a record yield projection of 1,350 kg/ha is expected to help stabilize production there. 
 
Production in India, the second leading producer, is expected to reach only 23.5 million bales this season, 3 million bales below 2011/12 and the lowest in 4 years. Area in India is expected 11 percent below last season’s high of 12.2 million ha; this season’s 10.8-million-hectare forecast is the result of both weak cotton prices and the limited monsoon rainfall to date.
 
Production in Pakistan, Brazil, and Australia are also forecast lower in 2012/13 due to area declines. Pakistan is forecast to produce 9.7 million bales, nearly one million bales below 2011/12. Brazil’s crop is projected at 6.8 million bales, considerably below the previous 2 seasons. Meanwhile, Australia is expected to produce about 4.3 million bales this season, similar to 2010/11. Although each of these countries’ crops is expected below 2011/12, their respective crop sizes remain high relative to historical averages.
 
Global cotton consumption in 2012/13 is forecast at 108.2 million bales, down about 800,000 bales from last month but still nearly 2.8 million bales (2.6 percent) above 2011/12. China, the leading mill user of cotton, continues to trend lower and is projected to use only 39 million bales in 2012/13, one million below last season and the lowest since 2004/05. China’s cotton spinners are losing market share due to the Government’s established price floor, which has resulted in domestic prices about 50 percent above world prices. In contrast, India’s consumption is expected to rebound by a similar amount to reach a record 21.5 million bales in 2012/13. 
 
Cotton mill use in Pakistan also is forecast higher, rising 900,000 bales to 11 million bales in 2012/13. Both India and Pakistan have increased exports of cotton yarn to China in recent months.

U.S. Department of Agriculture (USDA)


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