Joe Nicosia Senior Head of Cotton and Merchandising at Louis Dreyfus Company in Memphis has estimated US cotton acreage will grow between 12.5 to 13 million acres in 2018 partly due to favourable prices as against other crops. At the annual meeting of the Southern Cotton Growers and South Eastern Cotton Ginners Association, Nicosia, said cotton is still faring favourably when compared to other row crops in the US.
At current prices, world cotton area is likely to increase slightly in 2018-19, he said. “With a production outlook of 20 million plus bales, the US has the opportunity to maintain or even expand its share of world trade, but execution is going to be critical.” International cotton consumption has grown to 120.8 million bales for 2017-18 but this is still below the peak of 124.2 million bales in 2006-2007. Global consumption fell to 104.2 million bales in 2011-2012.
USDA reports world cotton production is expected to increase to 121 million bales in 2017-2018, as against 106.6 million bales in 2016-2017 and 96.2 million bales in 2015-2016. Currently, Nicosia forecasts a slight global cotton deficit in 2018-2019. He said the world has moved from a 16.1 million bale production deficit in 2015-2016 to production-consumption balance in 2017-2018.
USDA data estimates 2017-18 world ending stocks to be 87.8 million bales. Nicosia said this is still high and could impact prices. Nicosia expressed concern about cotton being held in US warehouses that is not being shipped to customers quickly enough. Nicosia said shipping delays by warehouses is harming all sectors of the industry.