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Global Cotton Production to Decline Over the Next Two Years

Cotton production worldwide will decline by 11 percent over the next two years, according to a HYPERLINK “http://icac.org/publications/recent-news” report by The International Cotton Advisory Committee (ICAC).

As a result of lower cotton output, and assuming no unexpected upward surge in cotton production, supplies will eventually stand at 23.2 million tons in 2013-2014.

This current decline in cotton production continues the downward output trend that began in 2011. Cotton output has been the lowest since 2008. The U.S. and Turkey, both major cotton producers, lead the downward spiral in production.

Cutbacks in cotton growth are also expected in China, Central Asia, Pakistan, India and French-speaking countries of Africa.

Worldwide cotton stocks in the period between July 2013 and July 2014 are expected to shrink by about six percent or 15.6 million tons.

Driving reduced cotton production are low prices for the commodity, and growers’ preferences for more profitable crops. Acre for acre, grains and soybeans put more money into farmers’ pockets.

China is the world’s largest consumer of cotton, but imports to the country for 2012-2013 are expected to drop a staggering 55 percent, according to a report from the HYPERLINK “http://www.usda.gov” U.S. Department of Agriculture.

As cotton production falls there has been a corresponding slowdown in global textile makers’ cotton mill orders. The downturn reflects slowing growth in the milling industry, although a three percent increase in milled cotton is forecast.

Despite the fall off in cotton production, U.S. stockpiles of the fiber are estimated to stand at more than seven million tons, and will continue to increase until March 2013.

In view of heavy U.S. cotton exports and perhaps anticipating shorter supplies of cotton, commodity futures traders recently bid up HYPERLINK “http://online.wsj.com/article/SB10001424127887324020804578151593707115104.html” cotton futures prices to a five-week high.



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