Global Cotton Production to Increase in 2017-18 Season After Two-Year Drop-off
Date: Wednesday, December 6, 2017
Source: Sourcing Journal
The planting area for growing cotton around the world is projected to rebound in the 2017-2018 season, after two years of declining planted area, with an increase of 11 percent to 32.5 million hectares, according to monthly report from the International Cotton Advisory Committee (ICAC).
Planted area in India is estimated at 11.55 million hectares for the period, with production projected to grow 8.7% to 6.2 million tons. The planted area in the U.S. is expected to continue to grow for the second consecutive season, with an estimated 20 percent gain to 4.6 million hectares.
Pakistan plantings for 2017-2018 are forecast to increase 24 percent to 3.1 million hectares, after several years of declining area, with an anticipated 24 percent growth in production to 2.06 million tons, ICAC said. Production is projected to increase during the season in all other major producing countries, including China, Brazil, Africa and Turkey. Global production in 2016-2017 rose 7 percent to 23 million tons, and is forecast to grow 12 percent during 2017-2018 to 25.74 million tons.
Global cotton mill use is projected to expand 3 percent in the season to 25.2 million tons.
“While mill use is rising, stocks will continue to grow as production outpaces consumption,” ICAC noted.
Imports into China are expected to remain steady, as the stock-to-use ratio decreases. Mill use in China is expected to grow 1 percent to 8.12 million tons. Cotton mill use is also projected to grow moderately in India, Pakistan, Turkey, Bangladesh, Vietnam and Brazil.
The gap between cotton prices and polyester prices has continued to narrow since mid-2017, ICAC said, despite a recent upturn in cotton prices that may push cotton consumption higher.
The U.S. Department of Agriculture reported that cotton prices averaged 70.15 cents per pound for the week ending Nov. 30, 2017. The weekly average was up from 68.37 cents a pound a week earlier, but was down from 70.40 cents a pound from a year earlier. ICAC noted that the Cotlook A index, an average of global market prices, stands at 81.75 cents a pound, up 70 cents from a week earlier and up from 79.80 cents a year ago. New York Futures are at 72.15 cents a pound, an increase of 78 cents in a week, but down 1.12 cents from a year ago.
Polyester staple prices averaged 88.5 cents a pound last month, down from 89.5 cents in October but above the 82.25 cent mark in November 2016.
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