“Poor returns for competing crops and relatively stable cotton prices may encourage farmers to plant more cotton” this crop year and boost production 3 percent, to 23 million tonnes, from the 2015/16 level, according to the International Cotton Advisory Committee. The intergovernmental body estimated cotton plantings at 31.9 million hectares, up 1 percent. Poor weather in many countries depressed yields last year. “Modest increases in cotton area in India, Pakistan and the United States are expected to offset losses in China, Brazil and Uzbekistan,” said the ICAC in a monthly report.
Despite the larger crop, world ending stocks would drop for the second year in a row in 2016/17, said ICAC, with consumption again outpacing production. Ending stocks of 20.45 million tonnes in 2015/16, down 8 percent from the previous year, represented the first reduction in stocks in six years. Global supplies still would equal 86 percent of annual use, a burdensome amount. China would hold 59 percent of the world stockpile. “Low prices for polyester, the main competing fiber has hurt world cotton consumption in 2015/16,” said ICAC.
ICAC and the USDA “offered identical forecasts for world cotton output next season, with the USDA’s estimate of 105.5 million bales equivalent to 23 million tonnes, said AgriMoney. “The ICAC and USDA were broadly in line on expectations for consumption too,” although USDA expects larger ending stocks. The USDA released its projections at its Outlook Forum last week.