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ICAC predicts growth slowdown of world cotton consumption

"With consumption slowing down, world cotton imports are forecast to decline by 3 per cent to 7.4 million tons in 2015-16, which would constitute the fourth consecutive season in which import volume declined after peaking at 9.8 million tons in 2011-12. China’s imports are expected to shrink by 33 per cent to 1.2 million tons. Imports by Vietnam during the first two months of 2015-16 are up 63 per cent from the same period last season and may reach 1.1 million tons by the end season."

"World cotton production is forecast to fall by 12per cent to 23.1 million tons, which is 1.3 million tons lower than projected demand in 2015-16. Decreases are expected in all five top producing countries."

 

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The International Cotton Advisory Committee’s (ICAC) has lowered world cotton consumption from initial projections to 24.4 million tons in its latest report. The figure is up less than 1 per cent from 2014-15. It may be recalled that in October 2015 the International Monetary Fund too had lowered its forecast for world economic growth in 2015 to 3.1per cent.

 

China lowers imports, countries focus on domestic markets

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The report states that despite optimism from the narrowing gap between polyester prices and cotton prices at the start of 2014-15 and falling domestic cotton prices, cotton consumption in China remained unchanged from 2013-14 at 7.5 million tons. With the latest revision, mill use in China is now forecast at 7.3 million tons in 2015-16. As China’s spinning sector continues to decline, mill use in Asia has grown.

India, the world’s second largest consumer of cotton lint may see mill use rise by 3 per cent to reach 5.5 million tons in 2015-16. Pakistan, which had in previous years benefited from the growing demand for cotton yarn in China, is expected to see mill use decrease this season by 10 per cent to 2.2 million tons. In addition to reduced demand from China, factors like an ongoing energy crisis, high energy costs, and high taxes that greatly add to the cost of production have caused many mills to reduce operations, and in some cases to shut down entirely.

Turkey’s consumption is projected to increase by 5 per cent to 1.4 million tons, due in part to expanding private consumption in the EU and political after its most recent elections. Lower production costs and favourable government policies for the textile sectors in Bangladesh and Vietnam will encourage consumption growth in these countries. Mill use in Bangladesh is forecast to rise by 10 per cent to just over 1 million tons while in Vietnam, by 20 per cent to 1.1 million tons.

With consumption slowing down, world cotton imports are forecast to decline by 3 per cent to 7.4 million tons in 2015-16, which would constitute the fourth consecutive season in which import volume declined after peaking at 9.8 million tons in 2011-12. China’s imports are expected to shrink by 33 per cent to 1.2 million tons. Imports by Vietnam during the first two months of 2015-16 are up 63 per cent from the same period last season and may reach 1.1 million tons by the end season.

Production dips in major producing countries

World cotton production is forecast to fall by 12per cent to 23.1 million tons, which is 1.3 million tons lower than projected demand in 2015-16. Decreases are expected in all five top producing countries.

India’s production may decrease by 4 per cent to 6.3 million tons due to reduced plantings and pest problems. China is in its fourth consecutive season of declining production, and its volume in 2015-16 is projected down 19 per cent to 5.3 million tons. In the United States, a 13 per cent reduction in harvested area and lower yields are expected to cause production to fall by 18 per cent to 2.9 million tons.

Pakistan’s production is forecast to touch around 1.9 million tons in 2015-16 while in Brazil, it is projected to decease by 6 per cent to 1.5 million tons. World ending stocks are expected to fall by 6 per cent to 20.7 million tons, which represents about 85 per cent of the volume needed for world mill use in 2015/16. Stocks in China are projected to be just under 12 million tons at the end of 2015/16, while stocks outside of China are forecast down by 4 per cent to 8.7 million tons.

www.icac.org

 
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