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ICAC: Record Chinese Imports Boost World Cotton Trade Prospects

May 2, 2012
By: Julianne Johnston, Pro Farmer Digital Managing Editor
 
 

The International Cotton Advisory Council (ICAC) says global cotton trade is expected to rise by 13% to 8.6 million metric tons (MMT) in 2011-12 -- driving by record imports from China. Imports by the rest of the world are projected to fall by 18% to 4.2 MMT.

"China will account for 52% of global imports this season," says the group. "The surge in Chinese imports has reduced the amount of cotton available in the rest of the world this season. U.S. exports are dropping by 21% to 2.5 MMT due to reduced supplies, but shipments from India, Brazil and Australia could reach record levels. As a result, while stocks in China are expected to more than double to 5 MMT in 2011-12, stocks in the rest of the world will increase at a more moderate rate of 14% to 8.1 MMT."

Additionally, ICAC says it expects global cotton area for the 2012-13 crop to be down 7% from the previous year to 33.6 million hectares in response to "lower prices, improving attractiveness of grains and soybeans and rising agricultural production costs."

"Based on average yields, world production could decline by 7% to 25.2 MMT," says ICAC. "The decline in production will be driven by China, expected to produce a crop of 6.4 MMT or 13% lower than in 2011-12. Production is also expected to decline in India, Pakistan, Brazil and Turkey. U.S. production could rise by 11% to 3.8 MMT despite reduced plantings, assuming improved weather and lower abandonment than in 2011-12."

Bottom line for prices: "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," states ICAC.


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RELATED TOPICS: Cotton

 
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