While the U.S. share of TurkeyΆs cotton imports has been declining for since its peak in 2010/11, U.S. cotton exports to Turkey have faced additional difficulties due to the initiation of an anti-dumping case against U.S. cotton in October, 2014. Even during peak months of U.S. shipments in 2014/15, U.S. share barely cracked 50%, with annual market share the lowest in any recent year except 2015/16.
By December 2015, monthly imports reached low levels not seen since 2010. After the announcement of final AD duty rates (initial findings were announced in February, final determinations made in April), the U.S. share has continued to decline.
Despite extremely robust import demand in Turkey this season, TurkeyΆs imports from the U.S. remain below last yearΆs June level. Total imports through June have risen almost 500,000 bales versus last year, while imports from the U.S. have fallen over 50,000 bales.
However, it is notable that the U.S. share of TurkeyΆs imports began to fall as early as the 2011/12 marketing year, and had declined steadily for at least two years before the initiation of the AD case as shown above.
Since 2011/12, Turkey has shown rising imports of Central Asian, Brazilian, and African growths especially, with Central Asian and African varieties especially appearing more competitively priced than U.S. cotton, which is generally one of the higher-priced sources of cotton for import in Turkey. The AD duty of 3% will exacerbate this existing price gap for the 2016/17 marketing year, which could pressure U.S. market share somewhat further.
Other factors are likely to make U.S. exports more competitive in 2016/17. For example, in the 2015/16 season particularly, U.S. cotton of desirable qualities was not highly available for contracting, reducing the ability of U.S. exporters to benefit from strong demand in Turkey.
In 2016/17, both the total size and the quality distribution of the U.S. crop are expected to improve noticeably. Likewise, stocks in Africa, Brazil, and Central Asia have tightened substantially over the last two years. These factors should enable U.S. exporters to weather the AD duty with little loss of business over the next marketing year.
Overview
For 2016/17, world production and beginning stocks are forecast down, due to lower production in India and China, which more than offset marginally higher production in the United States. Consumption is forecast lower due to a large decrease in Vietnam. World trade is lower, largely on weaker demand in Vietnam and Pakistan, as well as tight available supplies in Brazil.
U.S. production is up slightly on greater expected harvested area. Other balance sheet elements were unchanged, raising ending stocks. The U.S. season-average farm price forecast is boosted 4 cents to 63 cents/pound.
For 2015/16, world consumption is unchanged while production is down, resulting in lower ending stocks. Global trade is up. The U.S. season-average farm price is unchanged at 58 cents/pound.
Cotton: World Markets and Trade
Source: : http://apps.fas.usda.gov/psdonline/circulars/cotton.pdf
