India & China vie for top spot in 2014-15 cotton output
With India’s cotton output forecast at 6.3 million tons and China’s at 6.4 million tons, India stands a chance to grab the honour of being named top cotton producer in the world in 2014/15 season.
In season 2014/15, China and India will vie for the title of largest producer of cotton, says the International Cotton Advisory Committee (ICAC)
“The full impact of this year’s monsoon on India’s yields is unknown and due to late arrival of monsoon, the planting season was extended. Acreage under cotton in India is estimated at 11.8 million hectares, up by 1.3% from 2013/14”, ICAC adds.
Assuming a yield based on the 3-year average of 536 kilograms per hectare, India’s production is expected to decline by 4% to 6.3 million tons.
“While in response to the ending of government support outside Xinjiang, China decreased area by 8% to 4.2 million hectares. China’s production in 2014/15 would decline to 6.4 million tons, assuming an average yield of 1500 kilograms of lint per hectare”, the cotton body avers.
ICAC estimates that in 2014/15, world cotton industry is expected to enter its fifth consecutive season in which production exceeds consumption.
World production is forecast to decline by 400,000 tons to 26.05 million tons while consumption could grow by 4% to 24.4 million tons, resulting in a surplus of 1.7 million tons.
Since 2010/11, world production will have exceeded consumption by a cumulative 12.3 million tons and by the end of 2014/15, would reach nearly 14 million tons.
Much of the surplus is held by the Chinese government, but this season, more of the surplus will shift to the private sector in China and other producing countries.
As a result of the cumulative surplus, world ending stocks are projected to increase to 22.2 million tons at the end of 2014/15 with ending stocks outside China forecasted to achieve a record 9.7 million tons.
This expansion in world ending stocks outside China will put negative pressure on prices this season as China continues to liquidate its significant stocks.
Sales from the Chinese reserve reached 2.3 million tons in 2013/14. During August, the government sold an additional 300,000 tons, which reduces estimated cotton stocks held in reserves at around 11 million tons.
ICAC expects that over the next few years, the Chinese government will maintain sales from the reserve at a pace of 2-3 million tons a year.
After much needed rain arrived in this summer, the United States should see reduced abandonment and improved yields with production forecast to reach 3.7 million tons with an average yield of 933 kilograms per hectare.
While world consumption in 2013/14 experienced nil growth from 2012/13, it is predicted to expand by 4% in 2014/15.
Consumption in China could rise to 7.9 million tons in 2014/15, up from 7.5 million tons in 2013/14 given the fall in both international and domestic prices as well as improved demand overseas for downstream goods.
India’s demand is projected to reach 5.3 million tons in 2014/15, which is the third season of demand growth.
World trade is projected to decline by 1 million tons to 8 million tons in 2014/15, which is largely accounted for by a 30% decrease in Chinese imports to 2 million tons. (AR)
Fibre2fashion News Desk - India