Home / Knowledge / News / Textiles / USDA reduces Chinese cotton consumption
USDA reduces Chinese cotton consumption
13
Dec '08
USDA's December supply demand report confirmed the growing concern facing not only the U.S., but also the world cotton industry. Cotton production is declining as more land area is shifted to alternative crops and cotton consumption continues its nose dive. China and India, the world two largest producing countries will decrease the land area they devote to cotton. Additionally, they are also the two largest textile producing countries and the demand for their output is seeing a sharp decline.

New York cotton futures continue to follow the same signals that have a vice grip on the economies of the world. While the international news media continues to report that the roots of the world's economic problems were exposed by the U.S. mortgage crisis, it is now clear from world income data that consumer income began to decline in late 2007, thus setting the stage for a contraction of the world economy. The decline in consumer income was spread across numerous major economies, thus setting the stage for what has become the most severe economic crisis since the great Depression of 1929-32. Too, it is likely that the difficulties will not be put to rest for as long as five years.

The U.S. continues to see its textile industry shrink and textile demand in the major countries that buy cotton from the U.S. is also facing a decline, i.e., China, Turkey, Indonesia, and Bangladesh. The Pakistani textile industry is also facing a declining demand for raw cotton.

In its December report, USDA increased it estimate of 2008-09 ending stocks to 58.8 million bales, up 1.4 million above it November estimate. World production is expected to fall to 111.6 million bales, off 1.3 million from November. World demand, however, was estimated at only 116.6 million bales, down 2.75 million from last month.

Principal changes were reported for India, with production up 1.0 million bales to 25.0 and with consumption falling 500,000 bales to 17.5 million. Additionally, USDA reduced Chinese consumption another 1.5 million bales, down to 49.5 million (3.5 million bales below the 2007-08 level), and the first year to year decline in ten years. Turkey, Indonesia and Bangladesh accounted for another decline of nearly 300,000 bales.

USDA increased its estimate of the 2008-09 U.S. crop to 13.6 million bales, up 100,000 from last month. Reflecting the deterioration in world income, U.S. domestic consumption was lowered another 100,000 bales, down to 4.3 million. Far more noticeable, however, was the reduction in U.S. exports, down 750,000 bales to 12.25 million. The result was an increase in U.S. carryover of 900,000 bales, up to 7.1 million bales, reflecting a stocks to use ratio of 43 percent. As far fetched as it may seem, the stage is set for U.S. carryover in 2009-10 to climb to 10 million bales.

The demand for cotton is expected to fall further in 2009-10 as it is likely that world income will continue to fall for at least another 18 months. That sets the stage for the U.S. to continue to be the world's supplier of last resort for at least another five years.

Cotton prices will remain low for another year as income declines and consumers and agricultural producers continue to focus on the world food shortage and the resulting demand for food grains, feed grains, and oilseeds.

While it is easy to find a price forecast for cotton as low as 25 cents, I will continue to suggest the low to mid 30's will hold any price break.

O.A. Cleveland


Must ReadView All

Israeli minister announces tax cuts on consumer goods

Apparel/Garments | On 14th Dec 2017

Israeli minister announces tax cuts on consumer goods

The Israeli Government will slash taxes by $227 million, finance...

Courtesy: Kelvin Techstyles

Apparel/Garments | On 14th Dec 2017

Kelvin Techstyles fuses style and function in city apparel

Fusing style and function in outdoor clothing, Roseville,...

India’s WPI inflation for textiles up 0.3% in Nov 2017

Textiles | On 14th Dec 2017

India’s WPI inflation for textiles up 0.3% in Nov 2017

India’s annual rate of inflation, based on monthly wholesale price...

Interviews View All

Saket Garg
Garg Corporation

The biggest challenge is lack of skilled workforce and competition from...

Veronique Lee
Modavanti

‘Sustainable fashion is trending upwards, slowly but surely, as people...

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

Harsh Shah

Established in 1956 with a small beginning, Embee today manufactures a...

Urmil Arya

Sushila International, a well established textile organisation established ...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Yash P. Kotak
Bombay Hemp Company

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

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

December 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
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

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
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

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
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

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
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


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