US cotton demand expected to rise in 2016-17

In 2015-16, the limited supplies—particularly of higher quality cotton—and sharply lower imports by China reduced demand to a 30-year low.

For 2016-17, exports will continue to account for the majority of US cotton demand at 10.5 million bales, accounting for 74 per cent of the total demand, compared to 2015-16 estimated exports of 9 million bales.

The increase in exports is likely to push US share of global trade in 2016-17 to 32 per cent, up from last season's 26 per cent but similar to the share recorded in 2014-15, the USDA report said.

However, US cotton mill use for 2016-17 is estimated to remain flat at 3.6 million bales, supported by the continued demand for US cotton textile product exports. With US cotton production expected to exceed demand in 2016-17, ending stocks are projected to increase from the current season. Cotton stocks are forecast at 4.7 million bales on July 31, 2017, the highest since the 2008-09 season.

According to USDA's initial projection for the 2016 crop, US cotton production is forecast at 14.8 million bales, 15 per cent above the final 2015 estimate. Based on the Prospective Plantings report, 2016 cotton area is expected at 9.56 million acres, 1 million acres above 2015. The higher planted acreage is largely due to a return of area that was prevented from being planted last season due to wet conditions. In addition, relative prices favour cotton slightly over competing crops.

US cotton harvested area for 2016 is projected at 8.8 million acres, 9 per cent above the 2015 estimate of 8.1 million acres. (RKS) 

Fibre2Fashion News Desk – India