Global cotton trade likely to rise by 13pc to 8.6m tons


LAHORE: Global cotton trade is expected to rise by 13 percent to 8.6 million tons in 2011/12, driven by record imports from China, a statement said on Friday.

Imports by the rest of the world are projected to fall by 18 percent to 4.2 million tons, it said, adding that China will account for 52 percent of global imports this season.

The International Cotton Advisory Committee said that the surge in Chinese imports has reduced the amount of cotton availability in the rest of the world in this season.

US exports are dropping by 21 percent to 2.5 million tons due to reduced supplies, but shipments from India, Brazil and Australia could reach record levels, it said, adding that as a result, stocks in China are expected to more than double to five million tons in 2011/12 and the stocks in the rest of the world will increase at a more moderate rate of 14 percent to 8.1 million tons.

Cotton plantings for 2012/13 are now progressing in the northern hemisphere. World cotton area is expected to decrease by seven percent to 33.6 million hectares in response to lower prices, improving attractiveness of grains and soyabean and rising agricultural production costs, it said.

Based on average yields, world production could decline by seven percent to 25.2 million tons, according to the ICAC.

The decline in production will be driven by China, which is expected to produce a crop of 6.4 million tons, or 13 percent lower than in 2011/12.

Production is also expected to decline in India, Pakistan, Brazil and Turkey.

The United States production could rise by 11 percent to 3.8 million tons, despite reduced plantings, assuming improved weather and lower abandonment than in 2011/12, it added.

After two seasons of decline, global cotton mill use is projected to increase by four percent to 24.1 million tons in 2012/13, driven by improving economic growth and lower cotton prices, the ICAC said, adding that with the global production exceeding consumption again, the stocks are expected to continue to increase by nine percent to 14.3 million tons, or 59 percent of the world mill use.

The projected accumulation of cotton stocks will weigh on international cotton prices in 2012/13, but the extent of this downward pressure will depend in large part on how the Chinese national reserve is handled, it added.