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USDA Cotton: World Markets and Trade


11 April 2013

USDA Cotton: World Markets and Trade - April 2013USDA Cotton: World Markets and Trade - April 2013

Southeast Asia (Indonesia, Thailand, and Vietnam) is back with record net imports to meet record consumption f ollowing steady declines s ince the global economic crisis . This region is particularly dependent upon imports because domestic production only meets about 5 percent of consumption.
USDA Cotton: World Markets and Trade Reports

Boom in Southeast Asia Boosts US Cotton Shipments

Net Imports and US Market Share

Southeast Asian cotton imports have surged to meet expanding foreign demand for textile exports, primarily from Asian countries. Mills in China, for example, are seeking alternative sources to high-priced domestic yarn (now less competitive due to the support policy). Southeast Asian textile exporters are also benefiting from weaker competition from China.

U.S. cotton market share in the first six months of the marketing year has recovered significantly from last year, when Australia and Brazil were aggressively shipping record crops. Declining production in those countries and expanding demand in Southeast Asia have boosted year-to-date U.S. exports to the region by nearly 70 percent. Current outstanding sales suggest this rapid growth will continue through the rest of the marketing year.

Overview

Global cotton production and consumption for 2012/13 are essentially unchanged. Trade is raised, primarily due to a higher import forecast for China. U.S. exports and production are up. The season average farm price is raised to 72 cents/pound on continued strong prices.

Monthly Average Cotton Prices

Prices

The U.S. spot price and the A-Index continued to rise as China’s reserve policy tightens stocks outside of China.

2012/13 Trade Outlook

Major Exporters:

  • United States is up 250,000 bales to 13.0 million on strong sales to China.
  • India jumped 1.5 million bales to 7.0 million on higher world import demand.
  • Australia is revised up 200,000 bales to 4.8 million on higher world import demand.
  • Brazil is down 100,000 bales to 4.5 million on reduced exportable supplies.
  • Mexico is cut 100,000 bales to 250,000 on activity to date.

Major Importers:

  • China is boosted 1.5 million bales to 16.5 million on reported allocations of additional quotas to mills.
  • India is up 200,000 bales to 1.7 million as escalating exports tighten domestic supplies.
  • Vietnam is raised 150,000 bales to 2.3 million on rapid growth in demand for textile products.
  • Mexico is lowered 100,000 bales to 1.05 million as use shifts from imports to domestic supply.

April 2013

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