The latest USDA forecast estimates China will produce 27.8 million bales of cotton this crop year, with its textile segment estimated to consume 41 million bales. “That is not sustainable over the long term,” says Frederick Barrier, vice president, Sales, Staplcotn.

Barrier gave an in-depth and revealing overview of the current world cotton market situation at the recent Southern Cotton Ginners Association (SCGA) summer meeting in Branson, Mo.

“That is why this trade deal is so important,” says Barrier. “The current USDA numbers show China’s import numbers this year increasing to 10.5 million bales. The U.S. has already sold them 1.6 million bales so far this year, but even with that estimated import number, they will draw down almost 3 million bales on their stocks.”

Barrier keeps in touch with contacts in Texas and their water profile is improving. That optimistic news was reflected in USDA’s domestic production forecast of 22 million bales. That same forecast pegs U.S. exports to reach 17 million bales. “That’s going to be a tall order for us without China in the buying game,” says Barrier. “The stars will really have to align for that to happen.”

Cotton acreage across the Southeast is down slightly, but Mid-South acreage is up 15 percent, or 300,000 bales. “Our field staff assures me that Mid-South number is accurate, but we had so much flooding and wet weather during planting, I just didn’t think we had enough time to get this crop planted,” says Barrier. “The Memphis Eastern crop will increase about 250,000 acres, but the big growth in U.S. production, especially if their harvest season is good, is in Texas.”

The U.S. has 3 percent less cotton acreage this year, according to the June USDA forecast, but is forecasting an increase in production. “If this comes to fruition, it will be the largest crop we’ve had since 2005,” says Barrier.

World production and consumption

Barrier reminded everyone that after recovering from 2011, when cotton went to $2 a pound, there has been a steady growth line in world consumption, except a slight dip in 2018. “That world consumption is trending up for us,” says Barrier. “That’s what we would really like to see — a slow and steady growth. I would like to see world consumption reach 135 million bales in the near future.”

Based on a graph he often shares with Staplcotn grower clients, Barrier explained how the world has years where production outpaces consumption, and then there may be years of corrections. “To use a golfing term, those two numbers right now are currently at par,” says Barrier. “Some people would say that cotton is not being produced in the right country, but the world is producing the right amount of cotton in terms of what is being consumed.”

Bangladesh, China, India, and Vietnam are driving the world’s overall cotton consumption numbers. “Bangladesh continues to be a success story in terms of textile use growth and is forecasted to increase its consumption by 300,000 bales this year with India increasing its cotton use number by a half million bales — the largest growth by percentage across the world,” says Barrier.

The government report estimates China will be increasing its domestic consumption by 1 million bales. Barrier returned from China five weeks ago and based on what he learned, he questions that estimate. “I was there last year and they were as optimistic as they had ever been, but this time they were as pessimistic as they’ve ever been,” says Barrier. “I think the Chinese will invest in textile spindles outside of China. They can’t afford to tie up all their machines and equipment and not know how this trade war will end.”

Barrier complimented all of the ginners attending this year’s summer meeting and reminded them that they are the main reason the U.S. remains one of the foremost suppliers of high-quality cotton to the world market. “The job you all do processing seed cotton and preserving its fiber qualities should be commended,” concluded Barrier.