Preliminary projections for 2016/17 marketing year were released at USDA’s Agricultural Outlook Forum on February 26th. U.S. cotton planted acreage is projected at 9.4 million acres, or nearly 10 percent above 2015. Cotton planted area is expected to rise due mainly to a return of area prevented from being planted last season as a result of wet conditions.
U.S. domestic mill use is projected unchanged from 2015/16. U.S. cotton exports are projected at 10.7 million bales in 2016/17, an increase of nearly 13 percent, due to expectations for higher U.S. exportable supplies and relatively tight foreign stocks outside of China.
World cotton production is expected to rise 4 percent to 105.5 million bales. Area devoted to cotton is projected to remain about even with 2015, while yields are expected to recover from the adverse weather and pest problems that affected global output in the preceding year, notably in Pakistan and India. Partially offsetting these increases is a projected 1.0-million-bale decrease for China, as producers continue to adjust to lower prices and reduced government support.
World cotton consumption is expected to increase 0.8 percent, reaching 110.5 million bales. The growth rate is based on modestly positive macroeconomic projections, release of cotton from ChinaΆs national reserve, and continued strong fiber competition from polyester.
Consumption is expected to continue growing in Vietnam and Bangladesh, but at rates substantially below the 32-percent and 8-percent averages of the previous 3 years. Vietnam has benefitted from extensive investment from China in recent years and is likely to remain the fastest growing cotton consumer in 2016/17. Consumption in India, the second-largest spinner, is expected to remain at 24.5 million bales for the third consecutive year.
World trade in 2016/17 is projected at 35.0 million bales, the same level as 2015/16. ChinaΆs imports are also projected even with 2015/16, but PakistanΆs imports are likely to fall sharply as domestic production recovers. Overall world stocks are expected to fall 5 million bales to 99.0 million in 2016/17, but global stocks will remain well above historical levels. The projected decline in ChinaΆs stocks more than accounts for the global reduction. As a result, stocks outside of China are projected to increase marginally.
