World cotton imports are projected to remain unchanged at 7.6 million tons in 2015/16. While China is likely to remain the world’s largest importer in 2015/16, its imports are forecast to fall by 12% to 1.6 million tons. This represents 30% of its peak volume of imports in 2011/12. In 2015, the Chinese government restricted imports to the minimum volume required by the World Trade Organization to encourage mills to purchase domestic cotton. In July and August 2015, it sold nearly 60,000 tons from its reserve, but still holds 11 million tons. Given the large volume of production and reserves, imports are likely to be restricted again in 2016. Meanwhile, imports by other countries are expected to grow 4% to 5.8 million tons. Imports in Bangladesh, Vietnam, and Indonesia, the next three largest importing countries, are all projected to grow in 2015/16. Bangladesh imports are forecast to increase 1% to 972,000 tons while VietnamΆs imports are forecast up 2% to 956,000 tons. After decreasing in 2013/14, IndonesiaΆs imports recovered 13% to 735,000 tons in 2014/15, and are expected to increase 6% to 782,000 tons in 2015/16. The United States is forecast to lead in export volume, although its exports are projected down 9% to 2.2 million tons due to a smaller volume of production in 2015/16. After declining 48% in 2014/15, IndiaΆs exports may recover 34% to 1.2 million tons. Exports in the next three largest exporting countries are likely to decrease due to reductions in their exportable surplus. BrazilΆs exports are forecast down 10% to 766,000 tons, UzbekistanΆs down 5% to 565,000 tons and AustraliaΆs down 10% to 467,000 tons.

 

World cotton area is projected to fall 7% to 31.1 million hectares in 2015/16 due to significantly lower cotton prices in 2014/15. As a result, world cotton production is expected to fall by 9% to 23.8 million tons. IndiaΆs cotton area is estimated down 5% to 11.6 million hectares, and production down 2% to 6.4 million tons. ChinaΆs cotton production is set to decline by 16% to 5.4 million tons due to a 12% reduction in area and a 5% decrease in the average yield as a result of unfavorable weather. After a 24% expansion in 2014/15, cotton area in the United States has receded 13% to 3.3 million hectares with production declining 11% to 3.2 million tons. PakistanΆs production is projected down 11% to 2.1 million.

 

World cotton consumption could grow 2% in 2015/16 to 25 million tons with consumption growth remaining flat or slowing in many countries compared with last season. Consumption in China, the largest cotton consuming country, is expected to remain flat in 2015/16 at 7.7 million tons. IndiaΆs consumption growth is expected to slow to 3%, reaching 5.6 million tons, while PakistanΆs consumption growth remains steady at 2%, reaching 2.6 million tons. 

WORLD COTTON SUPPLY AND DISTRIBUTION
	2013/14	2014/15	2015/16		2013/14	2014/15	2015/16
					Changes from previous month
	Million Tons				Million Tons
Production	26.29	26.11	23.84		0.00	-0.08	0.14
Consumption	23.61	24.47	25.03		0.00	0.01	-0.02
Imports	8.65	7.58	7.62		0.00	-0.06	0.00
Exports	9.00	7.72	7.62		0.00	-0.18	0.00
Ending Stocks	20.31	21.79	20.62		0.00	0.04	0.20
Cotlook A Index*	91	71	74*

* The price projection for 2015/16 is based on the ending stocks/consumption ratio in the world-less-China in 2013/14 (estimate), in 2014/15 (estimate) and in 2015/16 (projection), on the ratio of Chinese net imports to world imports in 2014/15 (estimate) and 2015/16 (projection). The price projection is the mid-point of the 95% confidence interval: 62 cts/lb to 89 cts/lb.