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Cotton: higher global Production and Stocks


For 2019/20 USDA’s first world cotton projections unveiled last month that it is anticipated the production will raise world stocks slightly by 1 million bales, by exceeded consumption.

The China import, consumption and production outlook shows projected rise, while stocks are expected to fall for the fifth consecutive year. With the decline in China’s stocks, stocks outside of China are projected to increase significantly. As a result, the average A-Index and the season-average U.S. farm price are expected to decline.

U.S. 2019/20 cotton production is expected at 22.5 million bales, based on higher planted area and sharply lower abandonment. This would be the third-highest production on record; if realized, the expanded production would account for half of growth in global production. World cotton production is expected to rise 6.8 percent with yields rebounding in several countries and area also rising.

World trade is projected to expand, bring it near the record levels seen in 2011/12 and 2012/13. Much of the increase is expected in China as smaller sales from the State Reserve reduce available domestic supply, meaning that higher imports will be needed to close the gap.

Global consumption is expected to continue growing, but at a rate slightly below its long-run average based on weaker global economic growth.

Production for 2018/19 is forecast up slightly, led by larger crops in Brazil and Pakistan more than offsetting lower production in Australia. Trade is projected down slightly on lower imports for Indonesia and lower exports for Brazil. Global use is virtually unchanged. The U.S. forecast is unchanged. The U.S. season-average farm price is lowered 2 cents to 70 cents/lbs.


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