With output projected to increase by 4 percent to 6 million tons, India will remain the world’s largest cotton producer in 2017-18, according to a new report on global stocks from the International Cotton Advisory Committee.
After four seasons of decline, China’s cotton production is expected to rise by 7 percent to 5.2 million tons in the new growing season. Cotton production in the U.S. is forecast to increase 20 percent to 4.5 million tons. However, the full impact of the recent hurricane in Texas, where around 45 percent of U.S. production occurs, is still under assessment.
Pakistan’s cotton production is projected to increase by 17 percent to 2 million tons.
World cotton production and mill use are estimated at 25.1 million tons, which would result in a 9 percent increase in output and 2 percent rise in consumption, ICAC noted. World cotton stocks are projected to remain stable at 18.5 million tons at the end of 2017-18, and the world stock-to-use ratio is expected to be essentially unchanged at about 75 percent, or nine months of mill use.
The Chinese government sold more than two million tons from its national cotton reserve between May and August, lowering the reserve to around 6.3 million tons. China’s cotton stocks are forecast to decrease another 16 percent to 8.9 million tons, which would account for 48 percent of world stocks in 2017-18. Ending stocks held outside of China are expected to increase 22 percent to 9.6 million tons.
In 2017-18, world cotton area is projected to expand 9 percent to 31.9 million hectares and the world average yield is projected to remain unchanged at 789 kilograms per hectare.
After falling 2 percent in 2015-16, global cotton consumption rose 1 percent to 24.5 million tons in 2016-17, as world economic growth strengthened, ICAC noted.
In 2017-18, world cotton mill use is projected to increase by 2 percent to 25.1 million tons. Mill use in China is expected to grow 1 percent to 8.1 million tons, while India’s cotton consumption is projected to recover 3 percent to 5.3 million tons. Mill use in Bangladesh is projected to remain stable at 1.4 million tons in 2017-18 tons as widespread flooding in August has damaged infrastructure and made it difficult to transport goods throughout the country and to run businesses.
Severe monsoonal rain and flooding was reported in India last week, resulting in port closures in Mumbai and elsewhere in the region.
Euronews reported that about a third of Bangladesh was under water and the International Red Cross says the floods are the worst in 40 years. The Indian city of Bhubaneshwar has been inundated with floodwater and in Bihar state nearly a million people have been forced from their homes.
[Read more about the cotton price outlook: ICAC Forecasts Soft Cotton Prices Ahead]
The impact on cotton prices is uncertain, but a bumper crop and conservative use estimates could set up a soft price structure. However, Cotton Incorporated said in its August economic analysis that the large harvest expected in the U.S. and other countries outside of China will not be available for shipment and use until it is harvested and ginned, and the bulk of that harvest is still several months away.
“If the relatively low level of U.S. ending stocks for 2016-17 can be interpreted as near-term shortness of supply, and if the high level of U.S. committed export sales for 2017-18 (6.4 million bales as of Aug. 4) can be interpreted as near-term strength of demand, there is some opportunity for near-term upward movement,” Cotton Inc. said.
Spot cotton prices averaged 69.05 cents per pound for the week ending Aug. 31, according to the U.S. Department of Agriculture. The weekly average was up from 67.01 last week and compared to 65.30 cents reported the corresponding period a year ago.
The ready made garment sector in Bangladesh suffered another tragedy on Wednesday when six workers perished in a textile factory fire.Read more
The call for sustainability remains rampant in the industry and companies, including LVMH and Guess, are setting new environmental goals for 2020.Read more
Faced with a mountain of debt and suppliers in retreat, Toys R Us filed for bankruptcy this week.Read more
Labeling could be a boon for retailers who are looking to address consumer preferences and prioritize sustainability measures.Read more
The Chinese government’s ongoing program to inspect factories throughout the country seems to have had only a minor impact on apparel and textile facilities thus far.Read more
If the world has been forever altered by the swipe left, swipe right culture of online dating, apparel sourcing may be forever changed by Foursource.Read more
When a company like MAS Holdings, a major Sri Lanka-based intimates, activewear and leisure wear supplier that produces more than one million garments every day starts eyeing startups, it’s clear where the industry is headed.Read more