• Linkdin

Global cotton production to dip in 2012/13

19 Jul '12
6 min read

Brazil and Turkey are forecast to consume nearly 4.3 million bales and 5.6 million bales in 2012/13, an increase of 6 percent and 7 percent, respectively, from the previous year.  The United States is forecast to consume 3.4 million bales in 2012/13, a 3-percent increase from a year earlier.

Global cotton 2012/13 ending stocks are projected at a record 72.4 million bales, up 9 percent from the preceding year, as global production outpaces consumption. 

World stocks are forecast at their highest level relative to cotton consumption since at least 1960.  World stocks are forecast at 66 percent of annual consumption in 2012/13, compared with only 40 percent in 2009/10 and a 10-year average of 51 percent.

China’s policy of continued accumulation of cotton in the national reserve accounts for most of the projected increase in world stocks and would raise China’s share of total world stocks to 44 percent.  At the same time, the divergence between China’s domestic price support level and world prices is constraining China’s consumption, such that stocks there could reach 80 percent of total offtake. 

USDA continues to assume that China will release a portion of the cotton acquired by the national reserve during 2012/13, thereby partially offsetting China’s need for imports.  If the Government of China does not release reserves, then China’s stocks are likely to rise even higher than the current projection.  

With China absorbing most of the world’s cotton surplus, stocks in other countries mostly show balanced supply and use.  Stocks in the United States are forecast at 4.8 million bales, a 45-percent increase from the previous year, but the forecast stocks-to-use ratio of 31 percent is only marginally above the 10-year average. 

Stocks in foreign countries outside of China would account for about 39 percent of their use, in line with the previous two seasons.  Southern Hemisphere stocks are anticipated to fall about 1.2 million bales, mainly reflecting lower expected production in Brazil and Australia.  Projected stocks in India and Pakistan, at 30 percent and 28 percent of total use, respectively, are adequate but not excessive to support projected off take.  

Global Cotton Trade Forecast To Decline in 2012/13

World 2012/13 cotton imports are projected to decline 14 percent from the previous year to 37.4 million bales.  Several countries are expected to increase imports in 2012/13 but not cumulatively enough to offset a major import contraction by China.  

Bangladesh and Indonesia are forecast to import 3.6 million bales and 2.1 million bales, up 14 percent and 6 percent, respectively, from a year earlier.  Pakistan and Turkey are forecast to import 2.2 million bales and 3.0 million bales, an increase of 83 percent and 30 percent, respectively, from the preceding year.

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