In 2013-14, world ending stocks are forecast to be 19.9 million tons, more than 2 million tons higher than last season and in 2014-15 world ending stocks are forecast to rise for another season to 20.8 million tons as production is expected to exceed consumption for the fifth season.

World cotton production is forecast to be 25.7 million tons in 2013-14, a decrease of 4 per cent from last season, and is expected to fall again in 2014-15 by 1 per cent to 25.3 million tons. World cotton mill use is projected to rise by 1 per cent this season to 23.6 million tons and by 3.5 percent in 2014-15 to 24.4 million tons due to continued economic growth in Asia, where much of the cotton consumption takes place.

Meanwhile China has announced that it would be implementing a target price program for cotton and soybeans. For cotton, the program will be limited to that grown in Xinjiang. The area outside of Xinjiang is expected to decline in 2014-15, and China’s overall area is expected to decline by 9 per cent from last season to 4.2 million hectares.

The United States and China have made changes in their cotton policies. The US has repealed the Direct Payments, Countercyclical Payments and Average Crop Revenue Election programs for all commodities and replaced them for upland cotton by the Stacked Income Protection Plan. This provides premium subsidies to upland cotton producers to purchase insurance policies that cover shallow revenue losses--those below the level generally covered by standard crop insurance policies.