MUMBAI (Commoditiescontrol) – World cotton ending stocks at the end of 2014-15 is projected to rise 11 per cent to nearly 22 million tonnes, according to International Cotton Advisory Committee (ICAC).
The ICAC said after increasing substantially in each of the three previous seasons, China’s ending stocks are expected to remain stable reaching just over 12 million tonnes in 2014-15, and would account for 56 per cent of total world stocks.
Outside of China, ending stocks are forecast to increase for the second consecutive season from 7.5 million tonnes to 9.5 million tonnes, which is the largest volume of stocks in the last 35 years and is 60 per cent of the expected mill use in 2014-15. While the gap between production and consumption has declined since 2011-12, production is projected to exceed consumption by 2.1 million tonnes in 2014-15 with most of the excess being held by producing countries with exportable surpluses.
Production in China is estimated down 7 per cent to 6.4 million tonnes. While production has also fallen, the volume has been sufficient to meet 80 to 90 per cent of demand, particularly as China’s consumption has declined the last four seasons. However, much of the domestic production was absorbed by China’s national reserve, and spinners relied heavily on imports from other producing countries, allowing international cotton prices to remain elevated.
In 2014-15, China ended its reserve policy and in 2015 announced that it was limiting imports to the volume required under its WTO obligations.
Turkey is the world’s third largest importer, but like China, imports are expected to decrease in 2014-15. Consumption in Turkey is forecast to fall 4 per cent to 1.3 million tonnes as mills equipped with old machinery are shut down and cotton’s market share further declines as a result of the price attractiveness of synthetic fibers. At the same time, demand for imports is forecast to decrease by 13 per cent to 761,000 tonnes due in part to an estimated 11 per cent increase in domestic cotton lint production to 847,000 tonnes.
Despite a 4 per cent reduction in area this year and some losses from flooding, production in Pakistan is estimated up 11 per cent at 2.3 million tonnes given the 15 per cent increase in the average yield to 820 kg/ha. Imports by Pakistan are forecast to fall 9 per cent to 367,000 tonnes as the current season’s crop will meet most of its need with imports mostly consisting of longer staple cotton that is not available from domestic producers.
As the world’s largest exporter, the United States is affected by the decline in China’s and Turkey’s imports, though demand for high quality machine-picked cotton will help to limit export losses. In 2014-15, production in the United States is estimated at 3.5 million tonnes, up 25 per cent from 2013-14, and exports are forecast to increase modestly by 2 per cent to 2.3 million. As a result, ending stocks in the United States are likely to increase 58 per cent to just over 1 million tonnes.
India, the second largest exporter is projected to experience a significant decrease in exports this season, despite a high volume of production estimated at 6.8 million tonnes. Consumption is forecast to increase 4 per cent to 5.2 million tonnes while production remains stable, resulting in a smaller exportable surplus. Additionally, demand from China and Pakistan, two of its three largest buyers, has fallen. Ending stocks in India are expected to increase 40 per cent to 2.4 million tonnes in 2014-15 after two season of contraction.
(By Commoditiescontrol Bureau; +91-22-61391533)
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