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USDA Estimates Decline in U.S. and Global Cotton Production

The US Department of Agriculture estimated that cotton production and ending stocks would be lower for 2013-2014 than its previous estimate.

Some 12.9 million bales were forecast for production in the USDA’s latest and final Cotton Ginnings report, down 320,000 bales from its previous estimate.In the same USDA estimate, ending stocks were pegged at 2.5 million bales less than previously reported, the lowest stock of bales since 1990-1991.Exports and domestic mill production remained unchanged.

The narrowest ratio of stocks-to-use of 17.5% since 2010-2011 was also cited.Cotton prices were estimated to inch up a penny on the low and high end of the average range, ending at 76 to 79 cents a pound, reflecting the upward price trend.

China, an insatiable consumer of cotton, is expected to import one million more bales than last year, if the country’s current increased import rate continues through the year and the anticipated new import quotas are implemented. World production will be off somewhat, in part because of the U.S. decline.  But stepped up Brazilian and Burkina Faso production and increases elsewhere will almost make up for the expected lower production.

Increased imports by China, Pakistan and Vietnam are expected, while India and Indonesia will be importing less than the previous year.  World trade will post a net increase in some 1.2 million bales.

On the export side, Australia, Burkina Faso and India are expected to increase shipments.  Brazil and Pakistan will be exporting less than last year.World stocks will climb a notch, but not significantly.