Home / Knowledge / News / Textiles / World cotton trade to be challenging in current season
World cotton trade to be challenging in current season
20
Jan '14
World cotton trades in the 2013/14 season may be as challenging as it was in the 2012/13. The scenario is a reaction coming from the international demand, except for China, decreases of the worldwide supply, record ending stocks and possible higher availability of governmental stocks from China. Therefore, these aspects might push up or decrease quotes during the 2013/14 crop.

Most recent USDA projections for the 2013/14 season indicate that world cotton stocks may increase for the fourth consecutive crop, hitting the highest historical volume. World stocks are forecasted at roughly 21 million tons in 2013/14, 8.2% more than those in the 2012/13 and the double of the amount registered in 2009/10.

Significant increases of world stocks of cotton in the last crops are a result of the supply increase higher than demand’s. On one hand, prices higher than historical averages favored the production increase, but, on the other hand, limited the industrial use – players from the industry started to search cheaper products, such as artificial fibers.

The increase of global stocks has been occurring more intensively in China, where governmental policies have been underpinning quotes through direct purchases. At the end of the 2011/12 season, China’s stocks were 6.8 million tons, equivalent to 41% of world stocks. For 2013/14, the most recent USDA projection indicates that stocks in China might hit 12.5 million tons, or circa 60% of the total in the world.

The Chinese government is trying to sell its stocks, but, for the time being, the selling price (1.33 dollar per pound) is way higher than quotes for the imported product and the quality is lower.

However, it is worth noting that stocks from other countries (not from China), are at the same levels compared to that observed over the last four crops.

However, the consumption of these countries is moving up (5% from 2012/13 to 2013/14), leading the ending stocks/consumption ratio to be 34.6%, smaller than that observed in the 2012/13 season, of 36.5%, and in the 2011/12, of 41%. These data, in turn, indicate firm prices for the season. Therefore, the question is what will affect the market more: a possible pressure from China or the underpinning from other countries.

In Brazil, among aspects that may affect the market in the first semester of 2014 are registers of trades regarding the 2012/13 crop at BBM (Brazilian Commodity Exchange), which indicates that roughly 830 thousand tons are already traded.

Considering that Brazil may increase supply in 2013/14 to 1.56 million tons (according to Conab), there will be more domestic surplus from the second semester of 2014 onwards.

This fact might press down domestic quotes, leading them to be farther from the import parity, which is the maximum level for prices in Brazil, and closer to the export parity, which is the minimum value in the domestic market. The size of decreases, however, will depend on exports, which might reduce domestic stocks. For the time being, forecasts indicate shipments in 2013/14 following the same scenario observed in 2012/13, between 550 and 600 thousand tons.

Center for Advanced Studies on Applied Economics (CEPEA)


Must ReadView All

Textiles | On 20th Aug 2017

PetroVietnam, Vinatex discuss reviving PVTEX plant

Discussions are under way between PetroVietnam and textile and...

Courtesy: Mexx

Fashion | On 20th Aug 2017

RNF acquires Mexx fashion brand

RNF, the Dutch sports and fashion holding, has purchased the global...

Textiles | On 20th Aug 2017

Intertextile Shanghai Home Textiles opens on August 23

Intertextile Shanghai Home Textiles, Asia’s leading platform to meet...

Interviews View All

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Nuno Venda
ROQ

‘There has been an increase in demand for water based inks, rather than...

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

August 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
66.7%
No
16.7%
Skip
16.7%

Total Votes: 30

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
43.3%
No
36.7%
Skip
20.0%

Total Votes: 30

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
83.3%
No
6.7%
Skip
10.0%

Total Votes: 30

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
60.0%
No
10.0%
Skip
30.0%

Total Votes: 30


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search