Record Chinese Imports Boost World Cotton Trade in 2011/12
Tuesday, 15 May 2012 | 00:00
Global cotton trade is expected to rise by 13 per cent to 8.6 million tons in 2011/12, driven by record imports from China. Imports by the rest of the world are projected to fall by 18 per cent to 4.2 million tons. China will account for 52 per cent of global imports this season.
According to the International Cotton Advisory Committee (ICAC), the surge in Chinese imports has reduced the amount of cotton available in the rest of the world this season. US exports are dropping by 21 per cent to 2.5 million tons due to reduced supplies, but shipments from India, Brazil and Australia could reach record levels.
As a result, while stocks in China are expected to more than double to 5 million tons in 2011/12, stocks in the rest of the world will increase at a more moderate rate of 14 per cent to 8.1 million tons.
Cotton plantings for 2012/13 are now progressing in the northern hemisphere. World cotton area is expected to decrease by 7 per cent to 33.6 million hectares in response to lower prices, improving attractiveness of grains and soybeans, and rising agricultural production costs. Based on average yields, world production could decline by 7 per cent to 25.2 million tons.
The decline in production will be driven by China, expected to produce a crop of 6.4 million tons or 13 per cent lower than in 2011/12. Production is also expected to decline in India, Pakistan, Brazil and Turkey.
US production could rise by 11 per cent to 3.8 million tons despite reduced plantings, assuming improved weather and lower abandonment than in 2011/12.
After two seasons of decline, global cotton mill use is projected to increase by 4 per cent to 24.1 million tons in 2012/13, driven by improving economic growth and lower cotton prices. With global production exceeding global consumption again, global stocks are expected to continue increasing by 9 per cent to 14.3 million tons, or 59 per cent of world mill use.
The projected accumulation of cotton stocks will weigh on international cotton prices in 2012/13, but the extent of this downward pressure will depend in large part on how the Chinese national reserve is handled.
Source: The CropSite
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