Global 2011/12 production is forecast at a record 124.2 million bales, an 8-percent increase from the preceding year, as major Southern Hemisphere producers push for bigger crops. Brazil, the largest grower in the Southern Hemisphere, is expected to produce 9.0 million bales in 2011/12, unchanged from the previous year’s record, as favorable market prices are expected to sustain planted area.
In Australia, an abundant supply of irrigation water, adequate soil moisture, and relatively higher market prices are expected to yield a record 5.0 million bales, up 4 percent from a year earlier. Australia’s 2011/12 harvested area is forecast to rise 2 percent to a record 600,000 hectares.
China and India, the world’s largest and second largest cotton producers, are forecast to grow 33.5 million bales and 27.5 million bales, up 10 percent and 8 percent, respectively, from the previous year. Harvested area in 2011/12 for China and India is expected to rise 7 percent and 12 percent from a year earlier, to 5.5 million hectares and 12.5 million hectares, respectively.
Pakistan and the United States are forecast to produce 10.0 million bales and 16.6 million bales in 2011/12, a 14-percent increase from Pakistan’s previous crop and an 8-percent decrease in the United States. U.S. 2011/12 harvested area is forecast to decline 8 percent from a year ago, to nearly 4.0 million hectares.
The African Franc Zone and Central Asia are forecast to produce 2.9 million bales and 6.7 million bales in 2011/12, up 26 percent and 2 percent, respectively, from the previous year. World harvested area is forecast at 36.1 million hectares, up 8 percent from the previous year, while yields are forecast at 750 kg/ha.
World Cotton Trade Expected To Rise in 2011/12
World cotton exports in 2011/12 are forecast at 36.5 million bales, a 3-percent increase from the previous year, as Southern Hemisphere producers export record volumes from the bumper crops produced in 2010/11. Australia is forecast to export an all-time high of 4.3 million bales in 2011/12, up 71 percent from the preceding year. Brazil’s 2011/12 exports are forecast at 3.8 million bales, a 90- percent increase from a year earlier. Exports from the African Franc Zone are forecast at 2.4 million bales in 2011/12, up 14 percent from a year ago.
India, the world’s second-largest exporter of cotton, is forecast to export nearly 5.3 million bales in 2011/12, an increase of 3 percent from the preceding year. Exports in Uzbekistan are forecast at 2.8 million bales in 2011/12, a 6-percent increase from a year ago. The United States, the world’s leading cotton exporter, is expected to export 11.5 million bales in 2011/12, down 20 percent from the previous year, with its lowest global trade share (32 percent) in a decade, due to both lower available supplies and stronger competition for market share.
As the world’s largest cotton importer and consumer, China’s demand for imports has a significant impact on world cotton trade and prices. China’s 2011/12 imports are forecast at 14.0 million bales, up 17 percent from a year earlier and the second highest on record. China’s actual 2011/12 import level will depend on how Chinese authorities implement its cotton “macro-control” policies.
China has established a program to purchase cotton for its national reserve at a floor price of 19,800 Yuan per ton, or the equivalent of about $1.40 per pound, which is likely to be above the world market-clearing level. It is not yet clear how the Government of China will manage import quotas, in combination with reserve purchases. The Government has a stated objective of supporting prices to farmers, but has been less specific about rebuilding stocks in the national reserve.
USDA’s projected increase in imports would allow China to rebuild total ending stocks to about 3.5 months of mill use, sufficient to meet consumption and pipeline requirements at the beginning of 2012/13. To reach USDA’s import forecast, the Government of China will need to release some additional import quotas. If the Government wants to retain more cotton in the national reserve, it will need to increase import quotas commensurate with its stock objectives.
Bangladesh is expected to import 3.5 million bales in 2011/12, a 5-percent decline from the previous year and the lowest imports in 5 years, as mills there rely on stocks accumulated in 2010/11. Indonesia and Pakistan are forecast to import nearly 2.3 million bales and 1.5 million bales in 2011/12, an increase of 7 percent and 3 percent, respectively, from the preceding year. Turkey’s 2011/12 imports are expected to decline 5 percent from a year ago, to 3.2 million bales. Imports to South Korea are forecast at nearly 1.1 million bales in 2011/12, a 1-percent increase from the previous year.
World 2011/12 mill use is forecast at 114.3 million bales in 2011/12, virtually unchanged from the previous year. This revised cotton consumption forecast comes on the heels of a weakening global economic outlook arising from a slower recovery, as well as elevated fiscal and financial uncertainties in advanced economies. China, the world’s top mill user, is forecast to consume 45.5 million bales in 2011/12, a decline of 1 percent from the preceding year, and resulting in one of its lowest global consumption shares in recent years.
Consumption in India and Brazil is forecast unchanged from the previous year at 20.5 million bales and 4.4 million bales, respectively. Pakistan, the world’s third-largest mill user, is forecast to consume 10.3 million bales in 2011/12, a marginal increase of less than 1 percent from the preceding year. The United States and Turkey are forecast to consume 3.8 million bales and 5.8 million bales, respectively, down 3 percent from the previous year in the United States, but up 4 percent in Turkey.
Global 2011/12 ending stocks are forecast at nearly 55.0 million bales, up 22 percent from a year ago (fig. 3). Flat world consumption amidst concerns of a lagging economic recovery is expected to drive a significant recovery in ending stocks in 2011/12. The forecast global stocks-to-consumption ratio of 48 percent is marginally above the previous 5-average.