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ICAC: World cotton production to grow 1% in 2017-18
Apr. 11, 2017
As high prices in 2016-17 encourage farmers to plant cotton, world production is forecast to grow by one per cent to 23.1 million tons in 2017-18, the International Cotton Advisory Committee (ICAC) predicts in its latest report. However, the average yield is expected to decline by two per cent to 761 kg/ha, similar to the four-year average.
Country-wise, cotton production in India is projected to grow by two per cent to 5.9 million tons in 2017-18. In China, production could reach 4.8 million tons in 2017-18 as area expands by three per cent to three million hectares after five seasons of contraction. In the US, high yields and firm prices are likely to encourage farmers to expand cotton area in 2017-18. However, production is expected to remain unchanged from 2016-17 at 3.8 million tons as the average yield is assumed to be closer to the five-year average.
Meanwhile, world cotton mill use in 2016-17 is expected to remain unchanged at 24.1 million tons due largely to weak global economic growth and competition from polyester. Global consumption may recover by one per cent in 2017-18 to 24.4 million tons as cotton prices decrease, and growth in the global economy is expected to be much stronger in 2017 and 2018.
In China, after several seasons of decline, mill use is projected to rise by two per cent to 7.6 million tons in 2016-17 and by one per cent to 7.7 million tons in 2017-18. The gap between China’s domestic cotton prices and international cotton prices has decreased, making yarn imports less attractive than in recent seasons. In addition, mill use in Xinjiang has expanded, and the proximity to the higher quality cotton grown in this region offers cost advantages over yarn imports.
In India, after declining by three per cent to 5.1 million tons in 2016-17 due to high domestic and international cotton prices, mill use is projected to recover by one per cent to 5.2 million tons in 2017-18, the report said.
In terms of cotton imports, during the first seven months of 2016-17, China has imported over 600,000 tons, up by six per cent from last season during the same time period. China’s total volume of imports is expected to rise by two per cent to 983,000 tons in 2016-17. Imports by Bangladesh are expected to rise by 6 per cent to 1.4 million tons, and Vietnam’s imports are projected to grow by 17 per cent to 1.17 million tons in 2016-17.
Given its large exportable surplus and the high quality of its crop this year, the US is expected to export 2.9 million tons of cotton in 2016-17, accounting for 37 per cent of global exports. India’s exports are projected to decline by 23 per cent to 960,000 tons in 2016-17, partially due to the delay in harvesting earlier this season.
If China continues to sell cotton at the current volume from its national reserve, the total volume held by the government would decline to around 6 million tons at the end of August 2017. As a result, world ending stocks in 2016-17, are expected to decline by seven per cent to 19.1 million tons.
Source: Fibre2fashion News Desk
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