Cotton

Australian cotton down 48pc on last year: USDA

Grain Central, March 11, 2019

THE Australia cotton crop is now estimated to produce 2.5 million bales, down 0.1 million bales or 4 per cent from last month and down 2.3 million bales or 48pc from last year, according to the latest monthly report from the United States Department of Agriculture (USDA).

The area to be harvested is estimated at 0.3 million hectares, unchanged from last month, but down 43pc from last year.

The USDA predicts Australia’s average yield will be 1.814 tonnes/hectare, 6pc below the five-year average.

Persistent hot and dry conditions during January and February have reduced yield potential for dryland cotton and reduced availability of water for some irrigated fields.

Higher global stocks/production

USDA’s first 2019/20 world cotton projections unveiled last month anticipate global production will exceed consumption, raising world stocks slightly by 1 million bales.

The outlook for China shows imports, consumption, and production projected up, while stocks are expected to fall for the fifth consecutive year.

With the decline in China’s stocks, the UDSA expects stocks outside China will increase significantly.

World cotton production is expected to rise 6.8pc with yields rebounding in several countries and area also rising.

Larger crops in Brazil and Pakistan will more than offset lower production in Australia.

In the US, 2019/20 cotton production is expected to be 22.5 million bales, based on higher planted area and sharply lower abandonment.

This will be the third-highest production on record; if realised, the expanded production will account for half of growth in global production.

Trade expansion

World cotton trade is projected to expand, bringing 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.

Source: USDA

The USDA Cotton Outlook report: https://www.usda.gov/oce/forum/2019/Outlooks.htm

 

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