IN its first estimate of the 2017/18 crop, the International Cotton Advisory Committee (ICAC) Secretariat predicts that world cotton output will rise by two per cent to 23.4 million tonnes (Mt).

The expansion is the result of an increase in planted area, which is expected to grow by 5pc to 30.6 million hectares after two seasons of contraction.

After improving by 13pc to 781kg/ha in 2016/17, the world average yield is projected to decline by 2pc to 764kg/ha.

In 2016/17, the cotton area in India, the largest cotton-producing country, fell by 12pc to 10.5 million ha due to competition from food crops.

However, the average yield recovered by 16pc to 560kg/ha, and production in 2016/17 is estimated to rise by 2pc to 5.9Mt.

In 2017/18, India’s area is forecast to recover by 7pc to 11.2 million ha as firm domestic cotton prices and less attractive prices for competing crops attract more farmers to cotton.

Assuming a national average yield of 530kg/ha, production will increase by 1pc to 6Mt.

Cotton area in China declined for five consecutive seasons, reaching 2.8 million ha in 2016/17.

However, output has not fallen as quickly due to the fact that the share of cotton grown in Xinjiang, which has higher yields than other producing regions in China, has increased considerably.

China’s cotton production in 2016/17 is estimated at 4.7Mt.

In 2017/18, its cotton area may expand by 3pc to 2.9 million ha, and cotton output in China could reach 4.8Mt in 2017/18.

Following a season of higher than expected yields and firm cotton prices, cotton area in the United States is expected to expand by 10pc to 4.2 million ha in 2017/18.

The average yield in the US improved by 12pc to 958kg/ha in 2016/17, and production is estimated at 3.7Mt.

In 2017/18, production in the US is projected to rise by 7pc to 4Mt, assuming an average yield of 935kg/ha.

A significant drop in yields and poor returns in 2015/16 led to a 12pc decrease to 2.5 million ha in Pakistan’s cotton area in 2016/17.

The average yield recovered by 32pc to 699kg/ha and output is estimated up by 17pc to 1.8Mt.

Pakistan’s cotton area is forecast to increase by 3pc to 2.6 million ha, and assuming a yield of 739kg/ha, Pakistan’s production could reach 1.9Mt.

World cotton mill use is expected to remain stable at 24.1Mt in 2016/17 as high cotton prices discouraged growth in demand.

However, mill use may expand by 1pc to 24.3Mt in 2017/18.

Mill use in the top three consuming countries, China, India, and Pakistan, is expected to remain unchanged from 2016/17.

However, mill use is forecast to grow in Turkey, Bangladesh, and Vietnam by 2pcc to 1.5Mt, by 5pc to 1.5Mt, and by 7pc to 1.2Mt, respectively.

Given the continued growth in mill use in countries that depend on imports, world cotton trade is projected to increase by 5pc to 8.2Mt in 2017/18 from 7.8Mt in 2016/17.

Bangladesh is likely to maintain its position as the world’s largest importer of cotton with its volume forecast to rise by 5pc to 1.5Mt.

Vietnam’s import volume is projected to grow by 8pc to 1.3Mt.

Given the large exportable surplus and strong demand, exports from the US are anticipated to rise by 17pc to 3.2Mt in 2017/18.

India’s exports are forecast to fall by 7pc to 875,000t in 2017/18.

World cotton stocks are expected to decline by 6pc at the end of 2016/17 to 18.1Mt as China reduces its stocks by 17pc to 9.3Mt.

However, stocks outside of China are projected to increase by 8pc to 8.8Mt or 36pc of mill use in 2016/17.

Source: ICAC