Global cotton production in fiscal 2013-2014 projected at 117.4 million bales, down 3% from year-ago period and 6% below record 2011-2012 fiscal year, analysts say

Nevin Barich

KARACHI, Pakistan , October 6, 2013 (Daily Times) – Global cotton production in fiscal year 2013-14 is projected at 117.4 million bales largely due to an increase in output in India. Global production is forecast 3.0 percent below FY 2012-13 and 6.0 percent below FY 2011-12's record, according to the fibre analysts on Saturday.

The global cotton consumption is now expected to increase 2.0 percent following the 4.0 percent growth experienced in FY 2012-13.

The size of cotton crop in Pakistan is projected at 14 million bales, 6.0 percent or 800,000 bales above FY 2012-13, based on higher yields.

The major cotton producers China, India, Pakistan and Turkey other than US are forecast to account for a combined 70 percent of the world's cotton mill use in FY 2013-14.

India and Pakistan have seen their consumption rise in recent years. Consumption is currently forecast at 23 million bales and 13.2 million bales, respectively.

India and Pakistan have benefited, as their respective shares have risen to 21 percent and 11 percent, respectively while Turkey's 2013-14 share is expected to remain near 6.0 percent, said analysts.

The largest yarn suppliers to China during this period included Pakistan, India and Vietnam. These three countries combined accounted for 72 percent of China's cotton yarn imports during the past two seasons.

International cotton output would likely be in upper bracket despite some revisions by major cotton producing countries.

India's cotton mill use is expected to be at a record-high and Pakistan's consumption is near its record of 12.0 million bales.

India's role in the world cotton market has grown in recent years, as production, consumption and trade have expanded.

India is now both a major exporter and importer of cotton therefore, developments in India's supply and demand, as well as changes in policies supporting prices and restricting exports, have a profound impact on world cotton trade and prices.

The single largest adjustment was for India, which saw a significant increase in projected output, to reflect persisting optimism regarding a bumper crop. Revised figure is above the Cotton Association of India's (CAI) latest estimate of 37.2 million bales (170 kgs).

The United States is set to produce an estimated 17.9 million bales in the FY 2013-14 that started on August 1. Based on the December cotton price, that crop is worth about $5.3 billion.

US cotton will struggle to compete with India's bumper fibre crop as the rupee tumbles, making exports from the world's second-largest producer more attractive.

US cotton growers and merchants fear a prolonged government shutdown could cripple the fibre market by thwarting access to crucial federal loans worth almost $3 billion a year and to certificates crucial for exports, market participants said.

China, the world's largest spinner is projected at 36 million bales for FY 2013-14, equal to last season and the lowest in a decade.

Chinese global share is forecast to decline to 33 percent in FY 2013-14 as yarn imports have expanded considerably in recent years and replaced some spinning.

In Brazil, the FY 2013-14 cotton crop is expected to reach 7.2 million bales, 24 percent above the previous year's relatively small crop.

Although Vietnam is a relatively small consumer of cotton, mill use there has grown significantly to a projected 2.5 million bales in 2013-14, compared with only 1.6 million bales just three years ago. Published by HT Syndication with permission from Daily Times. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

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