April 12, 2012

US cotton forecast down as exports rise.

Due to reduced production and "very strong" export shipments in recent weeks, cotton ending stocks in the US are forecast to decline to 3.4 million bales.

According to the USDA's latest World Agricultural Supply and Demand Estimates report, exports of US cotton have risen 400,000 bales, while forecast average prices were raised by US$0.01 at the lower end.

However, the forecast for 2011/12 world cotton ending stocks recorded a sharp increase thanks to significant revisions to the estimated cotton stocks held by India last August.

As a result, beginning stocks in India were raised by 3.25 million bales, with ending stocks up by 1.6 million bales, the USDA said. It added that China's stockpiling of cotton was constraining free supplies, boosting the country's imports while limiting consumption and leading to a three million-bale increase in stocks to 23.1 million bales.

Assuming minimal release of reserve stocks before the end of the marketing year on July 31, China's forecast ending stocks will account for 35% of global stocks of cotton, the USDA said.

Meanwhile, world production estimates were cut by about 500,000 bales, thanks to reduced production in India and the US, offset by increases for Pakistan and Sudan. And global consumption estimates were reduced by one million bales, making them about 6% lower than 2010/11.