In 2015/16, world cotton production fell by 17% to 21.7 million tons, the lowest volume since 2003/04. Low international cotton prices at planting time led to a 9% contraction in area to 31.1 million hectares and the world average yield decreased by 9% to 699 kg/ha. However, while area is expected to contract by 1% to 31 million hectares in 2016/17, the average yield is projected to improve by 5% to 735 kg/ha, which would cause production to increase by 5% to 23 million tons. Cotton area in India is expected to expand by 1% to 12 million hectares in 2016/17, and production to increase by 8% to 6.3 million tons. Better monsoon weather may boost yield by 6% to 521 kg/ha, though pest pressure remains a concern. Cotton area in China is projected to decline by 10% to 3.1 million hectares due to high production costs and reduced government support, and production is forecast to decrease by 10% to 4.7 million tons. After contracting by 14% 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% to 3.4 million hectares, and production could increase by 14% to 3.2 million tons. In 2015/16, Pakistan’s average yield declined by 32% to 528 kg/ha while production fell to 1.5 million tons 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 pes, and as a result, yield is expected to partially recover by 25% to 662 kg/ha in 2016/17. Nevertheless, cotton area is likely to contract by 5% to 2.7 million hectares as farmers switch to competing crops with better returns, and production is projected to increase by 19% to 1.8 million tons.
Global consumption is forecast to remain at 23.6 million tons in 2016/17 as low prices for competing fibers make cotton less attractive. Consumption in China is projected to decline by 5% decline to 6.8 million tons. However, mill use is likely to grow by 11% to 1.2 million tons in Vietnam and by 10% to 1.2 million tons 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% to 5.4 million tons and in Pakistan by 1% to 2.2 million tons.
While mill use remains stagnant in 2016/17, world cotton trade volume may increase by 1% to 7.4 million tons. China’s imports are expected to decrease by 8% to 947,000 tons 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% to 6.5 million tons. Given the larger exportable surplus available in the United States, exports are projected to increase by 18% to 2.3 million tons in 2016/17.
World stocks at the end of 2016/17 are projected to decrease by 5% to 19.46 million tons as mill use exceeds production by 930,000 tons. Ending stocks in the rest of the world are forecast to rise by 3% to 8.7 million tons, though the stock-to-use ratio outside of China would be similar to the 36% registered last season.
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WORLD COTTON SUPPLY AND DISTRIBUTION |
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2014/15 |
2015/16 |
2016/17 |
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2014/15 |
2015/16 |
2016/17 |
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Changes from previous month |
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Million Tons |
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Million Tons |
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Production |
26.12 |
27.74 |
22.73 |
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0.00 |
-0.06 |
-0.28 |
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Consumption |
24.28 |
23.65 |
23.66 |
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-0.05 |
-0.01 |
-0.11 |
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Imports |
7.60 |
7.34 |
7.44 |
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0.00 |
-0.03 |
-0.07 |
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Exports |
7.64 |
7.34 |
7.44 |
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0.00 |
-0.03 |
-0.07 |
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Ending Stocks |
22.29 |
20.40 |
19.46 |
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0.07 |
0.01 |
-0.20 |
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Cotlook A Index* |
71 |
70 |
72 |
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* The price projection for 2015/16 is based on the ending stocks/consumption ratio in the world-less-China in 2013/14 (estimate), in 2014/15 (estimate) and in 2015/16 (projection), on the ratio of Chinese net imports to world imports in 2014/15 (estimate) and 2015/16 (projection). The price projection is the mid-point of the 95% confidence interval: 69 cts/lb to 71 cts/lb.
** The price projection for 2016/17 is based on the ending stocks/consumption ratio in the world-less-China in 2014/15 (estimate), in 2015/16 (projection) and in 2016/17 (projection), on the ratio of Chinese net imports to world imports in 2015/16 (projection) and 2016/17 (projection). The price projection is the mid-point of the 95% confidence interval: 58 cts/lb to 86 cts/lb.