The Turkish cotton crop will fall 17% this season thanks to low farmer returns, the US Department of Agriculture said.

Lower production will help boost import demand 9% from the world's second largest cotton buyer, in the face of an ongoing anti-dumping investigation against US exports.

The USDA's Ankara bureau forecast Turkish cotton production to fall to 2.66m bales, or 580,000 tonnes, in the year from August 2015, down 17% on the previous season.

This compares to the official USDA forecast of 2.80m bales in 2015-16.

Rising imports

The lower production will boost import demand, despite stagnant local consumption.

Turkish cotton imports were seen at 4.016m bales, up from the 3.800m bales previously forecast by the USDA.

This is up 9% from 3.675m bales in the previous season.

And imports from the US were seen at 1.720m bales, up from 1.554m bales in the previous season.

Anti-dumping fears

The rise in imports from the US comes despite uncertainties about an ongoing antidumping investigation being carried out by the Turkish government, which was instituted in October last year.

There have been fears that the investigation may impose retroactive duties on importers of US product.

"The Turkish textile industry is hoping the investigation will be finalized without any antidumping duties, claiming that such a move will make Turkish textile exports more expensive and will cause Turkish products to lose market share in international markets," the Ankara bureau said.

Lower returns

The fall in production was the result of lower plantings, at 370,000 hectares, down from 430,000 hectares in the previous season.

The Ankara bureau ascribed the fall in plantings to "lower returns on cotton compared to other crops such as corn in cotton growing regions".

The government recently announced that the production bonus paid to farmers was to be raised to 0.65 lira per kilogramme of seed cotton, up from last season's bonus of 0.55 lira.

Seed cotton is the unprocessed crop from which cotton fibre is ginned.

But the Ankara bureau said that the increase in price support this season was "late to be announced, and hence had a limited effect on farmers' planting decisions".

Falling yields

And yields were also seen down on the previous season "due to rainy and cold spring following planting in the Aegean and GAP regions".

"Rains also had adverse effects during the picking season, mainly lowering quality," the bureau said.

But the bureau reported anecdotal evidence that the incentive might be increasing for next season's planting, as lower production supports local prices.

FULL REPORT: http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Update_Ankara_Turkey_11-16-2015.pdf