COTTON: The 2012/13 U.S. cotton supply and demand estimates include slightly lower production and exports, resulting in lower ending stocks compared with last month. Beginning stocks are raised marginally, reflecting a revision to estimated U.S. 2011/12 ending stocks. The 2012/13 production estimate is reduced 3 percent, due mainly to lower estimated production for Texas and Mississippi, partially offset by increases for the Southeast. Domestic mill use is unchanged from last month, but exports are slightly lower due both to lower U.S. production and a reduction in total world imports. Ending stocks are now estimated at 5.3 million bales, equivalent to 35 percent of total use. The forecast range of 62 to 78 cents per pound for the marketing-year average price received by producers is narrowed 1 cent on each end.
An increase of nearly 2 million bales in world 2012/13 ending stocks is mainly attributable to sharply higher beginning stocks. Prior year adjustments for China, India, and Australia account for most of the increase in beginning stocks. For China, higher-than-expected 2011/12 imports and lower consumption are raising stocks by 1.3 million bales. For India, changes to the 2010/11 and 2011/12 balance sheets mainly reflect revisions published recently by India’s Cotton Advisory Board and raise stocks by 400,000 bales. World 2012/13 ending stocks are now projected at 76.5 million bales, including a revision to the India residual. Projected world stocks include 35.5 million bales for China.
World 2012/13 production is lowered 82,000 bales from last month, as increases for India and the African Franc Zone are more than offset by reductions for Brazil and the United States. World consumption and imports are reduced 600,000 bales, as lower demand by China is partially offset by increases for Pakistan and others; exports are reduced for Australia, India, and the United States. The decrease in China’s consumption is consistent with the 2011/12 reduction. China’s consumption is expected to fall 2.5 percent from last season due to the government’s price support, reserve, and stock policies.