MUMBAI (Commoditiescontrol) - World cotton production in 2016-17 is likely to turn better than a year ago as better yield is likely to offset acreage losses.
The latest monthly projection report released by International Cotton Advisory Committee revealed that global fibre output will rise 5 percent to 23 million tonnes as average yield is expected to improve by 5 percent to 735/ha, while acreage is expected to contract by 1 percent to 31 million hectares in 2016-17.
In 2015-16, world cotton production fell by 17 percent to 21.7 million tonnes, the lowest volume since 2003-04. Low international cotton prices at planting time led to a 9 percent contraction in area to 31.1 million hectares and the world average yield decreased by 9 percent to 699 kg/ha.
Cotton area in India is expected to expand by 1 percent to 12 million hectares in 2016-17, and production to increase by 8 to 6.3 million tonnes. Better monsoon weather may boost yield by 6 percent to 521 kg/ha, though pest pressure remains a concern.
Cotton area in China is projected to decline by 10 percent to 3.1 million hectares due to high production costs and reduced government support, and production is forecast to decrease by 10 percent to 4.7 million tonnes.
After contracting by 14 percent to 3.3 million hectares in 2015-16 due to less attractive cotton prices and overly wet soil conditions preventing planting in some areas, cotton area in the United States is expected to expand by 5 percent to 3.4 million hectares, and production could increase by 14 percent to 3.2 million tonnes.
In 2015/16, Pakistan’s average yield declined by 32 percent to 528 kg/ha while production fell to 1.5 million tonnes as pink bollworm, which is hard to spot in the field, re-emerged as a significant pest. However, measures are being taken to help combat the pest, and as a result, yield is expected to partially recover by 25 percent to 662 kg/ha in 2016-17. Nevertheless, cotton area is likely to contract by 5 percent to 2.7 million hectares as farmers switch to competing crops with better returns, and production is projected to increase by 19 percent to 1.8 million tonnes.
Global consumption is forecast to remain at 23.6 million tonnes in 2016-17 as low prices for competing fibers make cotton less attractive. Consumption in China is projected to decline by 5 percent decline to 6.8 million tonnes. However, mill use is likely to grow by 11 percent to 1.2 million tonnes in Vietnam and by 10 percent to 1.2 million tonnes in Bangladesh.
Despite declining demand for imports of cotton yarn by China in 2015-16, mill use in India is expected to recover by 3 percent to 5.4 million tonnes and in Pakistan by 1 percent to 2.2 million tonnes.
While mill use remains stagnant in 2016-17, world cotton trade volume may increase by 1 percent to 7.4 million tonnes. China’s imports are expected to decrease by 8 percent to 947,000 tonnes as the Chinese government continues to restrict imports in order to reduce its sizeable stocks of cotton. However, imports outside of China are forecast to increase by 3 percent to 6.5 million tonnes. Given the larger exportable surplus available in the United States, exports are projected to increase by 18 percent to 2.3 million tonnes in 2016-17.
World stocks at the end of 2016-17 are projected to decrease by 5 percent to 20.4 million tonnes as mill use exceeds production by 930,000 tonnes. Ending stocks in the rest of the world are forecast to rise by 3 percent to 8.7 million tonnes, though the stock-to-use ratio outside of China would be similar to the 36 percent registered last season.
Cotton Prices Likely Higher In 2016-17
ICAC In its latest projected said "Cotton A Index in 2016-17 likely to rise 2.85 percent to 72 cents/lb as against 70 cents/lb in 2015-16.
(By Commoditiescontrol Bureau; +91-22-40015533)