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Cotton production remains concentrated with rebound in 2010

14
Jul '10
The latest U.S. Department of Agriculture (USDA) forecast for 2010 projects world cotton production at 116.0 million bales, 13 percent above the 2009 estimate but slightly below the 2006-08 average of 116.3 million bales. The lowest stock level since 2003/04 has boosted prices, resulting in increased cotton area in 2010. More favorable growing conditions, compared with 2009, also are expected to provide a rebound in the yield.

Global cotton production remains concentrated among a handful of countries. The top five cotton-producing countries are forecast to account for over 80 percent of the world cotton crop in 2010, up slightly from the 2006-08 average. Figure 1 illustrates the cotton production shares for the major producers over the last several years. Shares for China and India—the top producing countries—have moved similarly in recent years but are expected to decline in 2010 as the United States' share rebounds. The U.S. share is projected to rise from 2009's 12 percent to nearly 16 percent due to its larger crop. Combined shares for Pakistan and Brazil are expected to remain similar to a year ago.

World Cotton Production Projected to Rebound in 2010/11
Global 2010/11 cotton production is forecast to increase 13 percent to 116.0 million bales from the previous year on expectations that producers will respond to higher prices of the fiber. Cotton prices have remained strong from earlier this year and the Cotton Outlook A-index for June 2010, an indicator of global cotton prices in that month, was at 93.04 cents per pound. Production increases are expected in major cotton-producing countries such as Australia, Brazil, China, Pakistan, the United States, and Uzbekistan. Australia, which has mostly recovered from the prolonged drought that hindered output, is projected to produce 2.2 million bales in 2010/11, a 38-percent increase from the previous year and the third consecutive annual production increase by this Southern Hemisphere country.

Brazil, another Southern Hemisphere country, is projected to produce 7.0 million bales in 2010/11, up 22 percent from the previous year and equal to the second largest production on record. The bulk of the Brazilian cotton is planted around December-January, making about three-fourths of the crop ready for harvest by June-July. According to the tenth survey of the Brazilian Food Supply Agency (CONAB) published in July, 2010, Mato Grosso State is expected to account for 48 percent of the Brazil's cotton production in 2010/11, compared with 50 percent in the preceding year. Bahia, the second largest cotton producing state in Brazil, is projected account for 33 percent of the nation's output, an increase from the 31 percent production share in the previous year.

China, the world's leading cotton producer, is forecast to produce 33 million bales, an 11-percent increase from the previous year. Xinjiang province will account for the biggest share of China's total cotton production. India's 2010/11 cotton production is forecast at 25 million bales, up more than 6 percent from the previous year and the largest production on record if realized. The United States' 2010/11 cotton production is projected to increase 50 percent to 18.3 million bales from the previous year, while Pakistan and Uzbekistan are forecast to produce 10.2 million bales and 4.8 million bales, up 6 percent and 20 percent, respectively, from a year earlier.


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