In its latest cotton report, the US Department of Agriculture (USDA) forecast that there will be a significant reduction in usage in the 2023-24 season, resulting in cotton global ending stocks shifting from a decrease in the earlier report to an increase in the January report.
USDA also made a few adjustments to the monthly cotton supply and demand estimates for the 2022-23 season by making only minor revisions to production and consumption, resulting in very minimal overall changes compared to the December report.
USDA increased the 2023-24 production by 60,000 tons due to a 110,000-ton growth in China’s output. However, the agency reduced US production by 80,000 tons due to a noteworthy decline in cotton cultivation area.
Import volumes have been reduced by 20,000 tons. Still, USDA also maintained high expectations for Chinese imports, which were again increased by 110,000 tons to 2.5 million tons, while imports of Pakistan were down 40,000 tons due to reduced demand for imports.
Consumption has been significantly reduced by 280,000 tons, with consumption in India, Turkey, and Pakistan lowered by 70,000 tons, 20,000 tons, and 40,000 tons, respectively. Export volumes are reduced by 20,000 tons, mainly due to a slight reduction in expected Indian exports.
Ending stocks also increased by 430,000 tons, with cotton stocks mounting in India and China.
There is a reduction of 740,000 tons in annual output, but the weak outlook for consumption recovery points to an unfavorable supply and demand situation in global cotton markets.