China still dominates the world cotton market
ICAC the International Cotton Advisory Committee released its newest estimates for the world cotton market and we would like to give you some details
The cotton plantings for 2014-15 will start in a few months in the northern hemisphere and is accounting for about 90 % of the world production. The planted area is expected to decline due to the expected decline in China.
In the season 2013-14 the ICAC Secretariat estimates that China’s cotton area is 4.6 million ha, a decrease of 8 % against the previous season and a further decline to 3.9 ha for the season 2014-15. However it is to note that this may change since planting season starts only in coming March, and on December 26, Xinhua News was reporting on a rural work conference indicating that trial subsidies for cotton and soybeans may be part of China’s reforms for agriculture to be implemented next year.
On the other hand, global cotton mill use is expected to continue to grow in 2014-15, on the basis of continued recovery in the global economy. A small gain on cotton prices could constrain the i8ncrease in demand for cotton, particularly if the price of polyester remains low.
The divergence between cotton production and consumption is expected to narrow in the 2014-15 season. There is still a significant global supply of cotto9n and stocks are growing. World stocks at the end of current season are estimated at 20 million t, 56 % of which will be in China. As of December 27, 2013 China is holding a reserve of 11.8 million t of cotton.
Worldwide cotton trade is expected to decline in 2014-15 by 9 % to 7.7 million t, due to the continuing decline of China’s imports. Also it is expected that China’s production will be lower, its consumption is also declining and its government currently holds enough stock for one-and-a-half years without any further imports or production.
TextileFuture wishes to add some comment: When we recall China’s history and its tremendous economic success since it became a member of WTO, we come to the conclusion that the Chinese declare openly the cotton reserves as strategic, but not explaining why. History tells us, that China is aspiring to become the world’s leading economy and political power to supersede the U.S. In this respect China invests heavily abroad in agricultural land, raw materials and it is the largest creditor of American Treasury bonds. And America will not be able to service its debts one day! China holds also the world’s largest foreign currency reserves. All of this reflects that China is arming itself to dismantle the supremacy of the U.S.A. If all of these factors are put to use at once by China against America and the Western Hemisphere, we will not only have a real economic war, but also a political power play, and considering Chinese mentality and time horizon we, the West might be on a losing path. We would like to draw your attention also to the strategic and political power game China is actually playing in Asia (also against Japan), also these point to the conclusions just presented to you.