Global cotton production to dip in 2012/13 (Global)

World 2012/13 cotton production is forecast at 113.8 million bales, a 7-percent decline from the previous year.  The expected output decline is driven mainly by a combination of relatively weak global cotton prices and rising production costs, encouraging major growers to shift area to more profitable alternatives. 

China and India are forecast to produce 30.5 million bales and 24.0 million bales, respectively, each a 9-percent decline from a year earlier.  China’s harvested area is also expected to decline 9 percent from the previous year to 5.0 million hectares in 2012/13.  India’s harvested area is forecast at 10.8 million hectares in 2012/13, down 11.5 percent from a year earlier. 

India’s production is revised down 4 percent from last month to 24.0 million bales, as low prices and a delay in the monsoon season have shaved production prospects.  Australia and Brazil are forecast to produce nearly 4.3 million bales and 7.0 million bales in 2012/13, a decline of 13 percent and 20 percent, respectively, from the previous year.  Australia’s harvested area is expected to decline 18 percent to 475,000 hectares, while Brazil’s area is forecast to contract 23 percent from a year earlier to nearly 1.1 million hectares. 

Pakistan and Uzbekistan are expected to produce 9.7 million bales and 4.1 million bales in 2012/13, down 9 percent and 2 percent, respectively, from the preceding year.  Area harvested in Pakistan and Uzbekistan is forecast to decline 3 percent from a year earlier to 3.1 million hectares and 1.3 million hectares, respectively.  

The United States and the African Franc Zone (AFZ) are forecast to produce 17.0 million bales and 3.1 million bales in 2012/13, up 9 percent and 2 percent, respectively, from the previous year.   Globally, 2012/13 harvested area is forecast at 33.3 million hectares, down 7 percent from a year earlier, and yield is projected at 745 kg/ha, similar to 2011/12.

World Cotton Consumption To Rebound, Stocks at Record in 2012/13

Global 2012/13 cotton mill use is forecast to increase 2 percent from a year earlier to 109.0 million bales.  China is expected to consume 39.5 million bales in 2012/13, down 1.5 bales (-3.7 percent) from the preceding year. 

If realized, the projected mill use will reduce China’s global share of cotton consumption to 36 percent, the lowest in 8 years.  The projected decline in China’s cotton mill use is expected to be more than offset by increases in other countries such as India, Pakistan, and Vietnam. 

India and Pakistan are forecast to consume 21.5 million bales and nearly 11.3 million bales, 5-percent and 10-percent increases, respectively.  Vietnam’s 2012/13 cotton consumption is expected to rise 9 percent from the previous year to nearly 1.8 million bales.

Brazil and Turkey are forecast to consume nearly 4.3 million bales and 5.6 million bales in 2012/13, an increase of 6 percent and 7 percent, respectively, from the previous year.  The United States is forecast to consume 3.4 million bales in 2012/13, a 3-percent increase from a year earlier.

Global cotton 2012/13 ending stocks are projected at a record 72.4 million bales, up 9 percent from the preceding year, as global production outpaces consumption. 

World stocks are forecast at their highest level relative to cotton consumption since at least 1960.  World stocks are forecast at 66 percent of annual consumption in 2012/13, compared with only 40 percent in 2009/10 and a 10-year average of 51 percent.

China’s policy of continued accumulation of cotton in the national reserve accounts for most of the projected increase in world stocks and would raise China’s share of total world stocks to 44 percent.  At the same time, the divergence between China’s domestic price support level and world prices is constraining China’s consumption, such that stocks there could reach 80 percent of total offtake. 

USDA continues to assume that China will release a portion of the cotton acquired by the national reserve during 2012/13, thereby partially offsetting China’s need for imports.  If the Government of China does not release reserves, then China’s stocks are likely to rise even higher than the current projection.  

With China absorbing most of the world’s cotton surplus, stocks in other countries mostly show balanced supply and use.  Stocks in the United States are forecast at 4.8 million bales, a 45-percent increase from the previous year, but the forecast stocks-to-use ratio of 31 percent is only marginally above the 10-year average. 

Stocks in foreign countries outside of China would account for about 39 percent of their use, in line with the previous two seasons.  Southern Hemisphere stocks are anticipated to fall about 1.2 million bales, mainly reflecting lower expected production in Brazil and Australia.  Projected stocks in India and Pakistan, at 30 percent and 28 percent of total use, respectively, are adequate but not excessive to support projected off take.  

Global Cotton Trade Forecast To Decline in 2012/13

World 2012/13 cotton imports are projected to decline 14 percent from the previous year to 37.4 million bales.  Several countries are expected to increase imports in 2012/13 but not cumulatively enough to offset a major import contraction by China.  

Bangladesh and Indonesia are forecast to import 3.6 million bales and 2.1 million bales, up 14 percent and 6 percent, respectively, from a year earlier.  Pakistan and Turkey are forecast to import 2.2 million bales and 3.0 million bales, an increase of 83 percent and 30 percent, respectively, from the preceding year.

On the export side, increases in several cotton exporting countries are expected to be more than offset by export declines in Brazil and India.  Brazil’s 2012/13 cotton exports are forecast at 4.0 million bales, down 17 percent from the preceding year’s record.  India is expected to export 3.7 million bales in 2012/13, down 63 percent from the previous year, due to lower supplies and higher domestic consumption. 

Australia and the AFZ are forecast to export 4.5 million bales and 2.8 million bales, an increase of 7 percent and 24 percent, respectively, from a year earlier.  If realized, Australia’s share of world trade will rise to 12 percent, while AFZ’s share will be 7.4 percent.  Uzbekistan and the United States are expected to export 2.8 million bales and 12.1 million bales in 2012/13, up 10 percent and 4 percent, respectively, from the preceding year.