Cotton World Markets and Trade in April
U.S.exports in 2016/17 are forecast at 14.0 million bales, a 53 % increase from the previous season. With global trade expected to rise by less than 4 percent and with stable import forecasts for major U.S. markets, U.S. market share will have to expand significantly in many countries for the forecast to be obtained. Overall, the U.S. share of world trade is expected to reach 39 %, up from 26 % last season, which would be the highest level in 6 years.
Available customs data from countries that account for over two-thirds of total world imports shows that the U.S. share of imports in these markets for the Aug-Dec 2017 period was 36%, compared to 27 % in the same period a year earlier, in line with the overall increase in U.S. trade share indicated by this month’s forecast. Higher U.S. market share is indicated in nearly all U.S. markets with data reported, with an exceptional increase in Taiwan. The U.S. share of China’s imports has rebounded remarkably from 11 percent last year (the lowest in over 2 decades) to 35 percent, which is in line with the historical average.
For major markets where there is no timely customs data (specifically Vietnam, Indonesia, Pakistan, and Bangladesh), reported U.S. exports for the Aug-Feb period are up by more than 140 percent, even though total imports by these countries are expected to show a much lower rate of growth. This further supports the strong growth in U.S. global market share.
For 2016/17, global use is raised only marginally, and production is raised, resulting in global ending stocks up slightly. Global trade is up marginally, while U.S. exports are raised by 800000 bales, reducing
U.S. ending stocks. The U.S. season-average farm price forecast is lowered a half-cent to 68 cents/pound.
The A-Index and U.S. spot prices ended March off slightly from levels earlier in the month, which were the highest seen in nearly three years.
2016/17 TRADE OUTLOOK
• Bangladesh is cut 200000 bales to 6.2 million on weakening reported import values and low availability from major partners such as Uzbekistan.
• Thailand is raised 100000 bales to 1.3 million as demand is now expected to be stronger in the latter part of the season.
• Indonesia is increased 100000 bales to 3.2 million on strong shipments from major suppliers, especially the United States.
• Pakistan is raised 100000 bales to 2.7 million on higher mill use.
• India is up 100000 bales to 2.3 million on a strong pace of trade to date, likely reflecting internal prices that remain high compared to the world.
• United States is hiked 800, 000 bales to 14.0 million on continued high shipments and sales to all major markets.
• India is lowered 500000 bales to 4.0 million as high domestic prices slow sales.
• Australia is lowered 200000 bales to 3.9 million as old crops stocks are exhausted and yet-to- arrive new-crop faces stronger competition.
• Uzbekistan is down 200000 bales to 1.5 million on lower demand in some of its major markets as well as policies withholding supplies for domestic use.
• Greece is raised 100000 bales to 950,000 on higher production as well as a strong pace of trade to date.
• Brazil is raised 100,000 bales to 2.9 million on higher carrying stocks due to reduced use estimates in the back year.