Global cotton production will increase 4 percent this year, led by larger crops in India and the United States, while China tries to whittle down its massive stockpile, said the International Cotton Advisory Council. For the second year in a row, India is forecast as the world’s largest grower, with an expected crop of 6.5 million tonnes, well ahead of China, the usual leader. The ICAC says cotton plantings in China will fall 10 percent as a result of lower support prices, and the crop may total 4.6 million tonnes, compared to nearly 5 million tonnes last year.
China would remain the No. 1 cotton consumer, however, using an estimated 6.8 million tonnes in the 2016/17 trade year. That number is down 5 percent from the current year, “due to increasing wages, high domestic cotton prices, and low polyester prices,” said ICAC, an intergovernmental body. Chinese imports during 2016/17 could fall 13 percent, or 936,000 tonnes, to roughly 4.3 million tonnes, it said. The import estimate is far below USDA’s projection of 5 million bales for China. Beijing owns half of the world cotton surplus and is trying to draw down its stocks by selling them slowly on the domestic market, reducing production and curtailing imports.
The ICAC says the global cotton glut will drop 5 percent during 2016/17 and will amount to 80 percent of annual use at the end of the marketing year.