USDA released its first 2018/19 cotton projections at the Agricultural Outlook Forum in late February, which included a 6-million bale decline in global stocks to 82.7 million bales, the lowest level since 2011/12.
As in the current season, stocks in China are expected to fall significantly as consumption continues to rise at a rate faster than the world average, production declines slightly, and imports (while expected to be at a higher level) will be limited, thus allowing continued reductions in the State Reserve.
Outside of China, despite forecast lower production, rest-of-world stocks are expected to rise for the third consecutive year as an expected modest growth in consumption and relative weak import demand by China leave supply higher than demand.
U.S. cotton exports are projected at a 13-year high of 16.0 million bales in 2018/19, due to expectations of a large exportable surplus. The U.S. share of world trade is projected to rise. Ending stocks are projected little changed at 6.0 million bales, but would be the highest level since 2008/09.
Greater supplies outside of China are expected to pressure cotton prices in 2018/19 with the average price received by producers falling within the range of 58-68 cents per pound, compared with the 2017/18 current forecast of 69 cents.