China holds more than half of the world's growing cotton stockpile, and it's running out of storage space.
The world’s cotton stockpiles continue to mount. China holds more than half of the world’s stockpile of cotton, a situation that won’t be easy for Chinese policymakers to rectify.
USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) put world ending stocks for 2013-14 at 97.6 million bales of cotton, a 1.2-million-bale increase from its December report. China accounts for 60% of that total.
World cotton stocks have been steadily rising. In 2012-13, world ending stocks were nearly 9% lower at 89.17 million bales. In 2011-12, they were almost 25% lower at 73.32 million.
Even though, China’s year-over-year imports have dropped dramatically—from 24.5 million bales in 2011-12 to 20.3 million in 2012-13—China’s ending stocks continue to grow due to plunging demand and increased production, says Fred Gale, senior economist with USDA.
USDA notes that production in Xinjiang province, which accounts for about 60% of the country’s total, could exceed 2012-13 levels. World production of cotton, by comparison, is expected to slip to 117.8 million bales from the previous year’s 123 million.