Global cotton output to decline 9% in 2015-16

Washington-based ICAC has forecast global output at 23.83 mn tonnes in 2015-16

Global cotton output is estimated to decline by nine per cent in crop year 2015-16 on a marginal diversion of the crop on low prices in major countries like India.

The Washington-based International Cotton Advisory Committee (ICAC) has forecast global output at 23.83 million tonnes (mt) in 2015-16 as against 26.2 mt the previous year. In 2013-14, a bumper global cotton output was reported at 26.28 mt.

Against that, however, global consumption of the natural fibre was forecast at 24.9 mt in 2015-16 as compared with 24.35 mt the previous year. With an import and export global balance at 7.7 mt, global carryover stocks are estimated at almost 21 mt in 2015-16 against 22 mt the previous year. ICAC forecasts India’s output at 6.4 mt, a dip of two per cent from the previous year.

After increasing 16 per cent to 9.4 mt in 2014-15, stocks held outside of China are expected to decrease by four per cent to nine mt by the end of 2015-16. Much of the world’s excess stock is held by the Chinese government, from purchases made by China National Cotton Reserve Corporation under its stockpiling policy from 2011-2014.

The Reserve made its final purchase of the 2013-14 crop in March 2014, with sales continuing through August, ending with an accumulation of 11.3 mt. On July 10, the Chinese government started to sell its stockpiles at prices close to the current domestic market price in the hope of maintaining market stability, ICAC said.

The agency estimates India’s ending stock at 2.2 mt in 2014-15, the second largest volume. Part of the rise is with the government, which procured under a minimum price support programme. Cotton Corporation of India purchases in 2014-15 are estimated at 1.5 mt and sales through the end of July at 650,000 tonnes. However, exports from India have fallen 51 per cent to 980,000 tonnes, also contributing to the build-up of stocks.