Record Chinese Imports Boost World Cotton Trade in 2011/12
Global cotton trade is expected to rise by 13% 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% to 4.2 million tons. China will account for 52% of global imports this season.
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% 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% 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% 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% 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% lower than in 2011/12. Production is also expected to decline in India, Pakistan, Brazil and Turkey. U.S. production could rise by 11% 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% 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% to 14.3 million tons, or 59% 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.
WORLD COTTON SUPPLY AND DISTRIBUTION
2010/11 2011/12 2012/13 2010/11 2011/12 2012/13
Million Tons Changes from January
Million Tons
Production 25.103 27.098 25.25 0.001 0.134 -0.22
Consumption 24.579 23.224 24.05 0.084 0.086 0.09
Imports 7.667 8.649 8.27 -0.031 0.285 -0.07
Exports 7.617 8.649 8.27 -0.030 0.285 -0.07
Ending Stocks 9.218 13.092 14.29 -0.084 -0.036 -0.34
Cotlook A Index* 1.64 1.05**
* Season-average Cotlook A Index (U.S. $ per pound).
* Average for the first nine months of the season (August 2011 to April 2012).