For the first time in five seasons, the consumption of cotton is likely to be greater than production in 2015/16 season, says the International Cotton Advisory Committee (ICAC) in its latest forecast.
“Low cotton prices are expected to persist through the rest of 2014/15 when farmers in the Northern Hemisphere make their planting decisions. As a result, world cotton area in 2015/16 is projected down 6 per cent to 31.6 million hectares,” ICAC said.
Accordingly, world cotton production in 2015/16 is forecast to fall 6 per cent to 24.6 million tons, the lowest volume since 2009/10 season.
On the other hand, world cotton consumption is expected to increase by 2 per cent to 24.7 million tons, making 2015/16 the first time in five seasons where consumption overtakes production. However, this would make only a small dent in the large stockpile of cotton as consumption could be only about 100,000 tons greater than production.
In China, ICAC projects cotton area to fall for the fourth consecutive season by 10 per cent to 3.8 million hectares, and production is forecast down 11 per cent to 5.7 million tons, the lowest level since 2003/04.
In India too, area under cotton is forecast down 5 per cent to 11.6 million hectares, and production to 6.5 million tons, which will make the country the largest producer of cotton for the second consecutive season.
In the United States, uncertainty over returns under the new STAX programme and low cotton prices relative to competing crops may make farmers less enthusiastic to plant cotton for 2015/16 season. As such, area under cotton is expected to contract 10 per cent to 3.6 million hectares, and production will decline 7 per cent to 3.3 million tons.
On the consumption side, China’s use is likely to remain stable at around 8 million tons, accounting for around one third of world consumption. In 2015/16, consumption in India, projected at 5.3 million tons and in Pakistan, at 2.4 million tons, will account for nearly a third of world cotton consumption. Bangladesh, Indonesia and Vietnam are projected to represent 10 per cent of all lint consumption in 2015/16.
World cotton trade is expected to rise 4 per cent to 7.9 million tons due to a partial recovery in consumption, particularly in countries that rely on imports in 2015/16. (RKS)
Fibre2fashion News Desk - India