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Cotton production to rise in 2010/11
Sep '10
World cotton production in 2010/11 is forecast at 117.0 million bales, up 16 percent from a year. Rising global cotton prices and improvements in credit availability have resulted in higher area in several major cotton producing countries.

World cotton area in 2010/11 is forecast at 32.9 million hectares, up 9 percent from the previous year and similar to the pre-crisis cotton area. Global cotton yield is forecast at 774 kg/ha, up 6 percent from the previous year. Yields are forecast higher in India and the United States the world's second and third largest cotton producers and also in Brazil and Uzbekistan, due to more favorable growing conditions.

In Australia, 2010/11 cotton area is now expected to increase to 375,000 hectares, up 88 percent from last season. The area forecast the highest in almost a decade is attributable to favorable world prices and ample supply of water from rainfall. Australia's 2010/11 production is forecast to nearly double to 3.0 million bales from the previous year.

China, India, the United States, Brazil, and Uzbekistan are expected to increase production in 2010/11 by 2 percent, 12 percent, 55 percent, 31 percent, and 23 percent, respectively, to 32.5 million bales, 26.0 million bales, 18.8 million bales, 7.0 million bales, and 4.8 million bales. Pakistan's production of 9.3 million bales is slightly below last season, but is revised down 9 percent from the July 2010 estimate, reflecting damage from the recent floods.

World Ending Stocks to Decline as Mill Use Rises in 2010/11
World cotton consumption in 2010/11 is forecast at 120.5 million bales, a 3-percent increase from the previous year. Most major cotton consumers are expected to increase mill use in 2010/11. China and India are forecast to consume 50.0 million bales and 20.5 million bales in 2010/11, up 3 percent and 5 percent, respectively, from the previous year. Turkey, Brazil, and the United States are forecast to increase mill use 3 percent, 5 percent, and 4 percent to 6.0 million bales, 4.6 million bales, and 3.6 million bales, respectively, from the previous year. Pakistan's 2010/11 mill use is expected to remain unchanged from the previous year at 11.0 million bales, as constraints on world supplies available for import limit growth.

Global cotton ending stocks in 2010/11 are forecast at 45.4 million bales, down 3.3 percent from the preceding year and the lowest in 14 years. World cotton consumption has outpaced production since 2005/06 leading to the tightening of global stocks. The production-consumption gap, which widened to 16 million bales in 2009/10, is expected to decline to 3.5 million bales in 2010/11. Nonetheless, as shown in figure 4, growing concerns about declining world stocks have boosted global cotton prices; the A-index has averaged over 92 cents thus far this marketing year and exceeded 99 cents for September 8 and 9.

China's ending stocks in 2010/11 are forecast to decline 16 percent to 15.8 million bales, the lowest in 16 years. India's 2010/11 ending stocks are forecast at 7.7 million bales, up 15 percent from the previous year, partly due to the domestic policy restricting exports.

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