World Cotton Surplus Estimate Raised on Bigger Crop in China
Global cotton inventories at the end of the marketing year will be 0.2 percent higher than forecast a month ago, the U.S. Department of Agriculture said.
Stockpiles as of July 31 will total 81.86 million bales, up from the January estimate of 81.72 million, the USDA said today in a report. World production will be 118.95 million bales, up from 118.83 million projected last month. Global use during the year will be 106.24 million bales, up from 106.06 million forecast last month, the department said.
The agency raised its output estimate for China, the world’s largest grower, to 34 million bales from 33.5 million. The forecast for the nation’s imports was raised 12 percent, to 14 million bales from 12.5 million last month. China’s inventories will be 42.61 million bales at the end of the season, up 4.9 percent from 40.61 million estimated in January, the USDA said.
The U.S. crop was 17.01 million bales in the harvest that started late last year, unchanged from last month’s forecast, the USDA said. The average estimate of nine analysts surveyed by Bloomberg News was 17 million. The previous crop was 15.57 million bales, each weighing 480 pounds, or 218 kilograms.
U.S. growers will export 12.5 million bales in the marketing year that began Aug. 1, up 2.5 percent from 12.2 million estimated in January. Shipments reached 11.71 million in the previous 12 months, the USDA said.
Unsold supplies at the end of the year will reach 4.5 million bales, down 6.3 percent from 4.8 million projected in January, according to the report. A year earlier, the surplus totaled 3.35 million bales. Yields in the U.S. averaged 866 pounds per acre, unchanged from last month, the USDA said. The figure was 790 pounds in the previous crop.
The agency previously reduced estimates after farmers in Texas, the country’s biggest grower, abandoned crops because of drought.
Through yesterday, cotton has slumped 63 percent since reaching a record $2.197 a pound on March 7, 2012, as the high prices encouraged growers to boost production, while the slowing global economy eroded demand. The fiber for March delivery fell 0.3 percent to 81.15 cents at 8:25 a.m. today on ICE Futures U.S. in New York.
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