Latest news from the cotton front
China Cotton: Production Estimate Revised Upward
China 2016/17 cotton production is estimated at 22.5 million 480-pound bales (4.79 million metric tons), up 0.5 million bales or 2 percent from last month, and up 2 percent from last year. The ginning data collected in early February by China National Cotton Exchange (CNCE) indicates lint output is higher than expected in all cotton growing regions. China cotton yield is estimated at a record 1719 kilograms per hectare (kg/ha), up 9.5 % from last year and up 17 % from the five year average of 1,465 kg/ha. In recent years the average yields in Xinjiang have been around 1832 kg/ha; however, in 2016/17 yields are estimated to significantly rise to record levels. The inspection data further shows record yields have been realized in Xinjiang, the major cotton growing province.
China’s cotton area has been declining since 2011/12 due largely to drastic changes in government agricultural policies aimed at managing excessive cotton stockpiles. The removal of cotton subsidies has resulted in lower profits and a subsequent reduction in planted area. The 2016/17 cotton area is estimated at 2.85 million hectares, down 7 % from last year and down 38 % from the 5-year average. Area reductions have been more significant in eastern China, down approximately 34 % by some estimates. Recent government reports indicate lower-than-expected area reductions (less than 6 percent) in Xinjiang province. Since the introduction of new cotton policies in 2014, the overall trend for cotton area continues to decline, at a more rapid pace in eastern China than Xinjiang province.
Harvest of the 2016/17 cotton crop is complete; the typical harvesting period is September and October. During the 2016/17 season most major growing regions received normal to above-average rainfall, generally resulting in favourable planting conditions and plant growth.
Pakistan Cotton: Production estimate decreased three percent
USDA estimates Pakistan’s 2016/17 cotton production at 7.7 million 480- pound bales, down 0.2 million bales or 3 % from last month but up 0.7 million bales or 10 % from last year. Harvested area is estimated at 2.4 million hectares, unchanged from last month, but down 0.4 million hectares or 14 % from last year. Yield is estimated at 699 kilograms per hectare, down 3 percent from last month, but up 28 % from last year’s pest- ravaged crop. Harvest of the main crop (planted in June) began in September, with peak harvest in October.
Harvest is complete, but seed-cotton arrivals will continue to trickle in at a slow pace over the next couple weeks. According to the January 15, 2017 Pakistan Cotton Ginner’s Association (PCGA) report, seed- cotton arrivals to date are up 11 % over last season. At the provincial level, reported arrivals are up 17 % in Punjab, which accounts for approximately 80 % of Pakistan’s total cotton crop. Cumulative market arrivals for the month of December are lower than the same period last year and confirm the trend of diminishing supplies. In recent years farmers have faced increased prices of agricultural chemicals and relatively lower cotton prices.