Low output & higher consumption to prop imports of US cotton
03 May '06
3 min read
Production Colombian production is expected to be 47,300 tons in 2005/06 MY, nine percent lower than a year before, in spite of the continued government support with high guaranteed prices.
Production is forecast to further decline a further 2 percent to 46,500 tons in the 2006/07 MY. The reduction is mainly due to reduced planted area in those regions that are considered marginal for cotton production, which have high production costs and low yields.
Area planted grew to previous higher levels due mainly to government guarantees of a high minimum price to growers and debt forgiveness up to 40 percent on credit granted to local producers associations.
Although the government is committed to maintaining the minimum guaranteed price and subsidized credit to growers, producers have not been successful in reducing production costs and controlling pest problems.
Government payments to maintain the minimum price to growers are estimated to total $33.3 million for 2006. The support price for the coastal-plains is $1,745 per ton of fiber and for the interior regions is $1,723 per ton of fiber.
Consumption Cotton fiber consumption is expected to increase by 3.3 percent during 2005/06, and is forecast to rise another 3.3 percent the following year. This increase of fiber consumption is explained mainly by increases in production of fabric and yarn for exports.
The industry pays a guaranteed price for local cotton fiber under an agreed price formula between the growers and the industry, and the government covers the difference between this agreed price and the minimum guaranteed price. This difference ranges between 20 and 35 percent of the total price paid to growers.
Trade Imports of cotton fiber are projected to rebound 45 percent to 44,500 tons in 2005/06 from 30,711 tons a year before, due to lower local production and increases in textile and garment production and exports.
Imports are forecast to increase to 49,500 tons, in the following marketing year (2006/07) due mainly to lower local production. In 2004/05, the US supplied virtually all of cotton fiber needs, 96 percent, followed by South Africa with 2.6 percent.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
