The latest USDA cotton projections for 2019-20 (August-July) indicate that:
World cotton production in 2019-20 is projected at 125.8 million bales, 5% (nearly 6.5 million bales) above 2018-19 and the second largest crop since 2011-12 when it was 127.2 million bales.
World cotton mill use is forecast to resume its growth after a 1.3% decline in 2018-19. Global cotton consumption is projected at 124.3 million bales in 2019-20 which is 2.6% above last year’s 121.1 million-bale estimate as lower global cotton prices support the
rebound.
Mill use is projected to increase in each of the leading raw cotton spinners in 2019-20, with China accounting for nearly one-third of the world total.
In 2019-20, cotton production projections for the major-producing countries are mixed, with the increases more than offsetting the decreases. World cotton harvested area is forecast at 34.7 million hectares which is 3.5% above 2018-19 and the highest since 2011-12. The 2019-20 global cotton yield is forecast at 789 kilograms/hectare which is slightly above the previous 3-year average.
Production
Global cotton production continues to be concentrated in a few countries. In 2019-20, the top five cotton-producing countries are forecast to account for more than 78% of total production.
India is forecast to be the leading producer in 2019-20, contributing to 23% of global production. India is projected to produce 29.0 million bales of cotton in 2019-20, 9% above 2018- 19, as India’s yield rebounds to the 3-year average. Area under cultivation is forecast to be unchanged at 12.6 million hectares.
China and the United States are projected to account for 22% and 17%, respectively. For China, 2019-20 cotton production is expected to match last year’s level at 27.75 million bales.
Brazil is expected to contribute to 10% and Pakistan 6%. Pakistan’s crop is driven by higher area and a nearly unchanged yield. Cotton Mill Use Estimates of world cotton mill use were lowered in July for both 2018-19 and 2019-20 mainly due to reductions for Bangladesh and China. For 2019-20, global cotton consumption is projected at 124.3 million bales that is higher by 3.2 million bales in 2018-19. China and India remain the largest users of raw cotton, with a combined total of 66.0 million bales, or 53 % of the world total.
Cotton mill use in China—
the largest spinner of raw cotton—is projected at 40.5 million bales in 2019-20 and 25.5 million bales for India. For Pakistan, 2019-20 cotton mill use is projected slightly higheat 10.7 million bales, one of the largest levels of the decade. Expanding mill use is also seen in a number of other countries such as Vietnam, Bangladesh, and Turkey to reach 7.6 million bales (+7.0 %), 7.4 million bales (+4.2%), and 6.7 million bales (+1.5%), respectively.
World Cotton Trade
Global cotton trade in 2019-20 is forecast at 44.2 million bales, 7.5 % above last year. With total trade up by 3.1 million bales exports from the United States and Brazil account for most of the increase.
The United States is forecast to boost its shipments by 2.5 million bales (17%), as increased supplies and higher foreign import demand in 2019-20 support higher exports.
Brazil will also have increased supplies from its record crop in 2019-20, with exports forecast to rise by 1.8 million bales (29 %).
Exports from India are forecast at 4.4 million bales (+600,000 bales) in 2019-20,
Shipments from Australia are projected to decrease by 50% to 1.8 million bales as supplies decline significantly due to production shortfalls.
Higher import projections for most of the leading importing countries are forecast for 2019-20.
China—the leading importer—is expected to import 10.5 million bales of raw cotton, 13.5 % above 2018-19.
Imports by Vietnam and Bangladesh are expected higher in 2019-20, as textile industries in these countries expand. For Vietnam, cotton imports are forecast at 7.8 million bales (+800,000 bales) in 2019-20, while Bangladesh’s imports reach 7.3 million bales (+400,000 bales).
Meanwhile, imports for Pakistan (+100,000 bales) and Turkey (-200,000 bales) are each projected at 3.0 million bales.
Cotton stocks
World ending stocks are forecast at 80.4 million bales in 2019-20 which is 1.2-million-bale increase from 2019-20, as global cotton production is projected to exceed mill use once again. Despite the increase, 2019-20 stocks remain at one of the lowest levels in the last 7 years. Similarly, the global stocks-to-use ratio is forecast to remain flat at 65 %, which would equal the lowest ratio since 2010-11. Although China continues to hold the largest share (41 %) of world cotton supplies, 2019-20 ending stocks there are projected to decrease 2.4 million bales (7 %) to 33.0 million bales—half the level reached in 2014-15. However, stocks outside of China are expected to rise 8 % (3.5 million bales) with a stocks-to-use ratio outside of China rising for the third consecutive season to 38%. Consequently, the average world cotton price (A Index) in 2019-20
is expected to decline from the 2018-19 estimate of 84.5 cents per pound.
