China Expected to Plant Less Cotton on Reduced Demand

January 21, 2014 03:48 AM
China Expected to Plant Less Cotton on Reduced Demand

China, the world’s biggest cotton consumer and producer, will reduce plantings of the fiber to below 4 million hectares (9.9 million acres), Oil World said.

China’s plantings in 2014-15 will fall from the record 5.9 million hectares in 2007-08 because of declining domestic demand, labor shortages and "stricter procurement standards," Hamburg-based Oil World said in a report. The China Cotton Association forecasts 2014 planting to fall to 4.2 million hectares as the government phases out a stockpiling program.

Cotton futures climbed 2.2 percent this year on ICE Futures U.S. in New York, and last week had the biggest weekly gain since June on signs of increased demand for U.S. cotton. In the week ended Jan. 9, export sales of upland cotton from the U.S., the biggest shipper, more than tripled from a week earlier, according to the U.S. Department of Agriculture.

Some farmers outside of China will increase plantings this year after cotton outperformed alternative crops in the past few months, Oil World said. U.S. cotton acreage will recover from last year’s low, Oil World said. U.S. cotton oil prices rallied in the past few weeks on shrinking supplies, it said. U.S. cottonseed crushing may decline the rest of the season, after falling 11 percent in the first four months of this marketing year that began Aug. 1, the researcher said.

U.S. cottonseed production in the 2013-14 season is seen declining 22 percent to 3.997 million metric tons from 5.14 million tons a year earlier, Oil World said. Exports are forecast to fall to 170,000 tons from 198,000 tons a year earlier.

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