Newsline-National | November 2014
Global cotton prices´ decline to continue
At the end of 2013-14, international cotton prices were around 80 cents and have continued falling in the first two months of the new season. Given the predicted 1.8 million tonnes of surplus cotton production and changes in China´s cotton policy, prices are unlikely to rise to the levels seen in the last two seasons.
With the fall in prices, world cotton consumption is forecast to rise nearly 4 per cent to 24.4 million tonnes with more of the consumption occurring in the latter half of the season as the market becomes more certain about the size of the new crop and can better determine an appropriate price for cotton. While cotton´s absolute volume of consumption is likely to grow, it will probably not gain back much of its market share as it takes time for the market to adjust. The price volatility observed in 2010/11-2011/12 is not forgotten, and other competing fibers´ market shares have been growing.
In 2014-15, 33.8 million hectares were planted with cotton, up 3 per cent from last season due to higher international cotton prices in 2013-14. World cotton production is forecast up 1 per cent to 26.2 million tonnes. With greater incentive to improve yield and quality due to the new policy, Xinjiang, the largest cotton-producing region in China and the province where the trial subsidy is being implemented, is expected to have a bigger harvest than last season, and China´s overall production is projected at 6.4 million tonnes in 2014-15. India expanded cotton area by 5 per cent as the delayed monsoon encouraged farmers to switch to cotton, and with yield closer to the 3-year average, production is likely to reach 6.6 million tonnes, making India the world´s largest cotton producer 2014-15.
Harvested cotton area in the United States could reach 3.9 million hectares as plentiful rainfall reduces the abandonment rate this season and production is forecast at 3.7 million tonnes, up 30 per cent from 2013-14.