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World cotton area to expand 5% in 2017-18: ICAC
May '17
The area under cotton globally is likely to expand by 5 per cent in 2017-18 season to 30.8 million hectares, as high cotton prices that prevailed in 2016-17 would encourage farmers to sow more cotton. However, world cotton mill use is expected to surpass world production, the International Cotton Advisory Committee (ICAC) has said in its latest report.

In India, cotton area is forecast to increase by 7 per cent to 11.3 million hectares in 2017-18 as farmers are encouraged by better returns due to high cotton prices and improved yields in 2016-17. Assuming yield is similar to the five-year average, production could increase by 3 per cent to just under six million tons, predicts ICAC in its report.

In China, after contracting in the last five seasons, cotton area may expand by 3 per cent to 2.9 million hectares due to the stable cotton policy and high cotton prices. Production in China is expected to rise by 1 per cent to 4.8 million tons, the first increase in five seasons.

Similarly, farmers in the United States are forecast to expand harvested cotton area by 12 per cent to 4.3 million hectares, and assuming a yield of 938 kg-ha, production could grow by 8 per cent to 4 million tons. 

Unlike the other top cotton producers, area in Uzbekistan is expected to contract by 4 per cent to 1.2 million hectares in accordance with government plans to reduce areas where yields are low, and use them for other agricultural products. However, plentiful soil moisture may improve the average yield by 1 per cent to 638 kg-ha, which will limit the loss in output. Uzbekistan’s cotton production is projected to decline by 2 per cent to 770,000 tons.

However, cotton area expansion may be more limited for producing countries in the Southern Hemisphere because of anticipating falling cotton prices in early 2017-18. Cotton area in Brazil and Australia is forecast to increase by 2 per cent to 950,000 hectares and 3 per cent to 574,000 hectares, respectively. Production in Brazil is projected to reach 1.4 million tons while Australia’s production is forecast to rise by 4 per cent to 1 million tons.

Meanwhile, world cotton mill use is expected to surpass world production for the third consecutive season in 2017-18. World consumption is projected to increase by 2 per cent to 24.6 million tons as world economic growth recovers in 2017 and 2018. Mill use in China is forecast to increase by 1 per cent to 7.7 million tons, accounting for 30 per cent of world cotton consumption. After decreasing by 3 per cent to 5.1 million tons in 2016-17, India’s consumption is forecast to recover by 2 per cent to 5.2 million tons due to competitive prices for its cotton yarn products, expanding capacity and the resolution of the consequences of demonetisation. Mill use in Pakistan may grow by 1 per cent to 2.3 million tons due to new incentives for textile exports offered by the government. Bangladesh’s cotton consumption is projected to expand by 5 per cent to 1.5 million tons, making it the fourth largest in 2017-18.

World cotton trade is projected up by 5 per cent to 7.9 million tons in 2016-17, after declines during the previous three seasons. Imports by Bangladesh are forecast to rise by 3 per cent to 1.4 million tons in 2016-17, while imports by Vietnam should increase by 16 per cent to 1.2 million tons. Imports by China, now the world’s third largest cotton importer, are expected to increase by 3 per cent to 987,000 tons.  Exports from the United States are projected to increase by 53 per cent to 3 million tons and are likely to account for 38 per cent of world exports in 2016-17. However, India’s exports are projected to decrease by 30 per cent to 886,000 tons.

In April 2017, sales from China’s reserve reached 404,000 tons, which is slightly lower than the total volume sold in March 2017 of 466,000 tons. At the end of 2016-17, China’s total stocks are projected to have fallen by 17 per cent to 9.3 million tons. World ending stocks in 2016-17, are expected to decline by 7 per cent to 17.4 million tons, and in 2017-18, by 5 per cent to 16.4 million tons, the report said. (RKS)

Fibre2Fashion News Desk – India

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