ICAC reports growth in World Cotton Consumption slows
World cotton consumption has been revised downward from initial projections to 24.4 million t, up less than 1 % from 2014/15. In its October 2015 report, the International Monetary Fund lowered its forecast for world economic growth in 2015 to 3.1 %
Despite optimism from the narrowing gap between polyester prices and cotton prices at the start of 2014/15 and falling domestic cotton prices, cotton consumption in China remained unchanged from 2013/14 at 7.5 million t. With the latest revision, mill use in China is now forecast at 7.3 million t in 2015/16. As China’s spinning sector continues to decline, mill use in Asia has grown. India, the world’s second largest consumer of cotton lint may see mill use rise by 3% to reach 5.5 million t in 2015/16. However, Pakistan, which had in previous years benefited from the growing demand for cotton yarn in China, is expected to see mill use decrease this season by 10% to 2.2 million t. In addition to reduced demand from China, an ongoing energy crisis, high energy costs, and high taxes that greatly add to the cost of production have caused many mills to reduce operations, and in some cases to shut down entirely. Turkey’s consumption is projected to increase by 5% to 1.4 million t, due in part to expanding private consumption in the EU and political after its most recent elections. Lower production costs and favourable government policies for the textile sectors in Bangladesh and Vietnam will encourage consumption growth in these countries. Mill use in Bangladesh is forecast to rise by 10 % to just over one million t, while in Vietnam, by 20 % to 1.1 million t.
With consumption slowing, world cotton imports are forecast to decline by 3% to 7.4 million t in 2015/16,which would constitute the fourth consecutive season in which import volume declined after peaking at 9.8 million t in 2011/12. China’s imports are expected to shrink by 33% to 1.2 million t. Imports by Vietnam during the first two months of 2015/16 are up 63% from the same period last season and may reach 1.1 million t by the end of the season.
World cotton production is forecast to fall by 12% to 23.1 million t, which is 1.3 million t lower than projected demand in 2015/16. Decreases are expected in all five top producing countries. India’s production may decrease by 4% to 6.3 million t due to reduced plantings and pest problems. China is in its fourth consecutive season of declining production, and its volume in 2015/16 is projected down 19% to 5.3 million t. In the United States, a 13% reduction in harvested area and lower yields are expected to cause production to fall by 18% to 2.9 million t. Production in Pakistan is forecast to reach around 1.9 million t in 2015/16, while in Brazil, it is projected to decease by 6% to 1.5 million t. World ending stocks are expected to fall by 6% to 20.7 million t, which represents about 85 % of the volume needed for world mill use in 2015/16. Stocks in China are projected to be just under 12 million t at the end of 2015/16, while stocks outside of China are forecast down by 4 % to 8.7 million t.