Cotton output in U.S., the worldΆs biggest exporter, may tumble 19 percent this year as farmers shift acreage to grains and dry conditions persist in parts of the South, the Department of Agriculture said. The decline exceeded analystsΆ estimates.
Production may slide to 14 million bales from 17.32 million in 2012, the agency said today in its first forecast for this yearΆs output. On average, analysts and traders expected a drop to 15.34 million bales, a Bloomberg survey showed.
The USDA estimates that planted acreage would drop 19 percent this year to 10.03 million from 12.31 million after cotton futures slumped 18 percent in 2012, while corn and soybeans climbed. The harvested area may decline to 8.4 million acres from 9.37 million, the agency said. Through yesterday, the fiber dropped 60 percent from an all-time high of $2.197 a pound on March 7, 2011, as global output rose and demand waned.
The reduction “will be based on a little bit of both,” a swing to grains and dry soil, Jordan Lea, the chairman or Eastern Trading Corp., an exporter in Greenville, South Carolina, said in an e-mail. “There are acres that this year will not get planted in Texas without significant rain in the next 30 days.”
From Jan. 1 to May 7, rainfall across most of West Texas, the top growing region, was 30 percent to 80 percent of 30-year averages, according to MDA Information Systems Inc. in Gaithersburg, Maryland. As of May 5, 17 percent of the U.S. crop was planted, compared with 35 percent a year earlier, the government said this week.
The abandonment rate, or unharvested crops, in the Southwest “is projected at 25 percent due to continued drought conditions,” the agency said.
The U.S. may ship 11.5 million bales in the 12 months that start Aug. 1, down 13 percent from 13.25 million in the current season, the USDA said today in a report. Unsold supplies will be 3 million bales, equal to 20 percent of total use, and down 25 percent from 4 million this year. Yields may fall to 800 pounds per acre from 887 pounds.
World output will be 117.82 million bales, down 2.6 percent from 120.95 million, the agency said. Consumption will be 110.43 million bales, up 2.1 percent from 108.15 million. Stockpiles may be 92.74 million bales, up 9.4 percent from 84.78 million, with China accounting for most of the increase.
Inventory in China, the biggest consumer, will climb 21 percent to 58.18 million bales next year from 48.26 million this year, the USDA said. The nationΆs stockpiles will represent 63 percent of the worldΆs total, according to the report. Chinese imports will drop 34 percent, to 12 million bales from 18.25 million in the current year.
A bale weighs 480 pounds, or 218 kilograms.
