20170512-USDA-USDA_Cotton_and_Wool_Outlook_2017.05.12_18页_822kb

Summary of Economic Research Service Outlook: Cotton and Wool, 2017/18

Core Content

The U.S. Department of Agriculture (USDA) released the Cotton and Wool Outlook for the 2017/18 season, highlighting global and domestic trends in production, consumption, and trade. Key points include:

• Global Cotton Consumption is projected to exceed production for the third consecutive season, reaching 115.8 million bales in 2017/18.
• Global Cotton Production is forecast at 113.2 million bales, a 7% increase from 2016/17, driven by a rebound in cotton area despite a slight yield decline.
• China, India, and Pakistan are expected to account for 62% of global cotton production and 53% of global cotton mill use in 2017/18.
• U.S. Cotton Production is forecast at 19.2 million bales, a 12% increase from the final 2016 estimate, due to higher prices and increased planted area.
• U.S. Cotton Demand (mill use plus exports) is expected to decline by 2% to 17.4 million bales in 2017/18, primarily due to reduced exports.
• Global Cotton Trade is forecast to increase to 37.6 million bales, the highest in 4 years, with China as the third largest importer.
• Ending Stocks are expected to rise in the U.S. and other major producers, while China's stocks are projected to fall significantly due to government policies.

Main Points

Global Outlook

• Cotton Consumption: Expected to grow by 2.3%, reaching 115.8 million bales in 2017/18.
• Cotton Production: Forecast at 113.2 million bales, up 7% from 2016/17.
• Mill Use: China and India will lead with 61.5 million bales of combined consumption.
• Trade Trends: Global trade is expected to rise 2%, with China importing 5.0 million bales.
• Stocks: Global ending stocks are projected to decline by 3%, to 87.1 million bales, with China's share dropping to 45% by the end of 2017/18.

U.S. Outlook

• Production: Forecast at 19.2 million bales, up 12% from 2016, driven by increased area and favorable prices.
• Planted Area: U.S. cotton area is expected to reach 12.23 million acres, with Southwest accounting for 62% of upland cotton area.
• Harvested Area: Projected at 11.4 million acres, up 20% from 2016.
• Yield: National yield is forecast at 810 pounds per acre, slightly lower than the previous season.
• Demand: U.S. demand is projected at 17.4 million bales, with 80% from exports.
• Ending Stocks: Expected to rise to 5.0 million bales by July 31, 2018, the highest since 2008/09.
• Farm Price: Projected to range between 54 cents and 74 cents per pound, 5 cents below the 2016/17 estimate.

Key Information

• Key Regions:
  • Southwest leads in upland cotton area, with 7.4 million acres.
  • Xinjiang, China is the main area for high-yield ELS cotton.
  • California remains the largest producer of ELS cotton in the U.S.
• Weather Impact: Favorable moisture conditions in the Southwest have led to a lower abandonment rate for cotton.
• Stocks-to-Use Ratio:
  • Global ratio is expected to fall to 29% in 2017/18.
  • U.S. ratio is projected at 29.1%, slightly higher than the previous season.
• International Trends:
  • India is the largest producer, expected to increase output by 6%.
  • Pakistan and Brazil are also projected to increase production.
  • Australia will see a 9% increase in production due to a shift to irrigated areas.
• Exports:
  • U.S. exports are forecast to fall by 3% to 14.0 million bales.
  • India is expected to increase exports by 7%.
  • Australia and Brazil are also expected to see export growth.

Outlook Highlights

• Global Consumption is expected to continue outpacing production, with ending stocks decreasing.
• U.S. Cotton Market faces increased competition from other major exporters.
• China's Cotton Stock Reduction is expected to continue due to policy changes and market dynamics.
• Domestic Demand in the U.S. is supported by textile exports, but export volumes are projected to decline.

Data and Tables

• Table 1: Provides U.S. cotton supply and use estimates for the 2017/18 season.
• Table 2: Shows global cotton supply and use projections.
• Table 3 and 4: Detail U.S. fiber supply and demand, including cotton and wool.
• Table 5: Contains U.S. and world fiber prices.
• Table 6: Lists U.S. textile imports by fiber type.

Contacts and Resources

• Leslie Meyer (ERS) can be contacted at lmeyer@ers.usda.gov.
• Subscription: Available via USDA's ERS e-mail notification service.
• Data Sources:
  • Cotton and Wool Monthly Tables
  • Cotton and Wool Chart Gallery
  • Related Websites

Conclusion

The 2017/18 outlook indicates a global surplus of cotton supply over demand, with China, India, and Pakistan as the main drivers of consumption and production. The U.S. cotton market is expected to see a 12% increase in production but a 2% decline in demand, leading to a rise in ending stocks. Global trade is projected to increase, with China and India playing key roles. The outlook also highlights the impact of weather, prices, and policy on production and trade dynamics.