USDA: World Cotton Trade Will Decrease in 2013/14

Business News on May 21

World 2013/14 cotton trade is expected to decrease by 12% from the previous year to 39.5 million bales, due to reduced sources of goods available for export and reduced demand for foreign cotton due to Chinese policies. The 2013/14 forecast shows that global trade fell for the third consecutive year, as major exporting countries, such as Australia, Brazil, India and the United States, are expected to reduce their exports significantly. Australia is expected to export 4.7 million bales in 2013/14, down 10% from the previous year, resulting in its share of world exports being the same as 12% of the previous year. Brazil's 2013/14 exports are expected to be 2.8 million bales, down 37% (1.7 million bales) from the previous year, due to the reduction in the supply of 2012/13 crops. India is expected to export 5.5 million bales in 2013/14, down 1.7 million bales (24%) from the previous year, partly due to competition from its growing domestic textile industry. The United States (the world's largest cotton exporter) is expected to export 11.5 million bales in 2013/14, down 13% from the previous year, due to a significant drop in production in 2013/14. The CFA franc zone and Central Asia are expected to export nearly 4.3 million bales and 5.3 million bales respectively in 2013/14. The CFA franc zone increased by 13 per cent over the previous year, while Central Asia remained unchanged.

Imports from Bangladesh, Pakistan, Mexico and Turkey are expected to increase, but not enough to compensate for the decline in imports from China and India 2013/14. China's 2013/14 imports are expected to be 12 million bales, down 34% from the previous year, due to the increasing official reserve stocks to protect the minimum support price for cotton farmers, resulting in reduced demand for foreign cotton. In forecasting China's 2013/14 cotton imports, the USDA took into account current reserve placement prices as well as import quota policies. The 2013/14 forecast believes that China's share of global imports is 40%, a decrease of 14% from the previous year. India expects to import 1 million bales in 2013/14, down 700,000 bales (41%) from the previous year. Bangladesh and Indonesia are expected to import 3.8 million and 2.5 million bales respectively in 2013/14, up 4% and 2% respectively from the previous year. Pakistan and Turkey are expected to import 3.1 million bales and 4 million bales respectively in 2013/14, up 13% and 8% respectively from the previous year. Mexico and Thailand are expected to import 1.2 million and 1.6 million bales respectively in 2013/14, up 20% and 5% respectively from the previous year.

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