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ICAC: China Still Dominates World Cotton Market

With cotton plantings for 2014/15 due to start up in the next few months, early predictions from experts show a decline in world area for the season, due in large part to an expected decline in China, still the dominant player in the world cotton market.

For the 2013/14 season, the International Cotton Advisory Committee (ICAC) estimates China’s cotton area to be 4.6 million hectares, an 8 percent decrease from the previous season. The country’s cotton area is expected to decline further to 3.9 million hectares in the coming season.

But this may yet be an early prediction, ICAC notes, as planting won’t begin until March and trial subsidies for cotton and soybeans could be a part of China’s agriculture reform plans to be implemented next year, according to Xinhua News.

As of December 27, China’s cotton reserve totaled 11.8 million tons. ICAC says although production will be lower in the coming season, consumption is also declining and the current reserve is enough to tide the country over for 1.5 years without any additional imports or production.

At the end of the current cotton season, ICAC forecasts world stocks to be 20 million tons, 56 percent of which will be in China.

World trade is expected to drop 9 percent to 7.7 million tons as a result of China’s continuing decline in imports.

ICAC says, “Global cotton mill use is expected to continue growing in 2014/15, on the basis of continued recovery in global economic growth. However, a small gain in cotton prices could constrain the increase in demand for cotton, particularly if the price of polyester remains low.”