World cotton production exceeds consumption; this trend is observed over the seasons with a slight twist. In 2010/11, world production exceeded consumption and this trend has continued into this season, though declining production and a slight rise in consumption is closing the gap. In 2013/14, world production is forecast at 25.7 million tons, a decrease of 4% from 2012/13 and 8% from peak production of 28 million tons in 2011/12. This is due principally to lower yields and less area planted with cotton. The world average yield in 2013/14 is forecast at 777 kilograms per hectare, down 2% from last season and world area is forecast at 33.1 million tons, also down 2% from last season.
World cotton mill use is projected up by 1% this season to 23.6 million tons, reversing the downward trend in cotton consumption since 2009/10. World cotton mill use should continue to grow in 2014/15 (by 4%) if the health of the global economy continues to improve. The International Monetary Fundâ€™s latest projections, published in January 2014, indicate world economic growth at 3.7% in 2014, up from 3.0% in 2013 and 3.1% in 2012.
In 2013/14, world ending stocks are forecast to be 19.9 million tons, more than 2 million tons higher than last season. Despite the excess of cotton stock in the world, the Cotlook A Index for January has averaged about 91 cents per pound, up from 85 cents per pound seen in November and early December 2013. This is due in part to Chinaâ€™s cotton policy, which has removed much of the excess cotton from the world market. Given Chinaâ€™s share of world cotton stocks, if it decides to offload its reserve stock onto the world market, price is expected to decrease. At the end of 2013/14.
China is expected to hold 58% of world stocks with an expected ending stock of 11.5 million tons.
Courtesy: Textile World
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