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The International Cotton Advisory Committee said in a statement world production was also forecast to drop by another 6 percent to 24,6 million tonnes during 2013/14.
“From 2012/13 to 2013/14, cotton production in China and the United States is forecasted to fall by 700 000 tonnes to 6,7 million tonnes and 3 million tonnes respectively.
“Production in India is forecast to decline by 170 000 tonnes to 5,7 million tonnes as farmers continue to switch out cotton for more profitable alternatives,” it said.
“China’s production decline is also attributed to labour shortages as farm workers migrate to cities searching for urban employment.” The ICAC said that despite the decline in production, global cotton mill use was rising at an estimated 7 percent from 22,1 million tonnes last season to 23,7 million tonnes in 2012/13.
“Mill use is projected to rise another 2 percent to 24,3 million tonnes in 2013/14. Mill use in China is falling to an estimated 8,3 million tonnes in 2012/13 as the national cotton policy remains unclear, and another drop of 300 000 tonnes to 8 million tonnes in 2013/14 is expected, the lowest in 10 years,” it said.
ICAC said imports by China were estimated at 3,7 million tonnes in 2012/13 and 3 million tonnes in 2013/14.
“Because of the Chinese national cotton reserve policy, a seismic shift in the location of world cotton use is underway. Decreased mill use in China will be partially offset by increases in India, Bangladesh, Turkey and Pakistan,” it said.
It said world cotton stocks were set to rise to 18 million tonnes by July 2014, which would represent approximately nine months of world mill use.
Assuming the Chinese government adhered to the current reserve policy, ICAC said, the Cotlook A Index was projected to average 88 cents and 122 cents per pound in 2012/13 and 2013/14, respectively. – New Ziana.
Online Reporter