Cotton Outlook Brightens: Global production up, US sees a rebound in 2024-25.
The USDA Cotton Outlook, released in December 2023, paints a cautiously optimistic picture for the 2023-24 season and offers promising projections for 2024/25. Here's a breakdown of the key insights:
Global production
Slight surplus anticipated in global cotton output. Production is forecast at 112.8 million bales. The forecast is a dip of 3 per cent to 112.8 million bales in 2023-24. China, the US and Australia are expected to see significant declines. Global cotton mill use is projected to increase by 1 per cent to 112.5 million bales in 2023-24. Pakistan, India, and Vietnam will drive this growth. This indicates a potential for slightly increasing ending stocks. Pakistan, India, and Vietnam lead the growth in production, while China, the US, and Australia see declines. China and India remain the dominant cotton-spinning countries. Global cotton trade is expected to rise by 16 per cent to 42.9 million bales in 2023-24, primarily due to increased exports from Brazil.
US cotton market
Production is expected to rebound in 2024-25 US and is projected to jump to 16.0 million bales, driven by an increase in planted area and a decrease in abandonment rate. This marks a 23 per cent increase compared to 2023-24. Domestic mill use in the US is forecast to remain at its lowest level since 1884-85. It is expected to be at 3.5 million bales in 2023/24, raising concerns about long-term demand within the country. US cotton exports is expected to increase 15 per cent to 10.5 million bales in 2023-24, driven by competitive prices and higher global demand.
Trade & prices
Global trade is on the rise. World cotton trade is expected to see a significant 16 per cent increase this season, primarily due to surging exports from Brazil. Meanwhile cotton prices have been volatile in recent months, influenced by various factors like production costs, global demand, and trade dynamics.
Table: Cotton production, mill use
|
Statistic |
2022/23 |
2023/24 (Forecast) |
Change (%) |
|
Global Cotton Production (million bales) |
116.3 |
112.8 |
-3% |
|
Global Cotton Mill Use (million bales) |
111.3 |
112.5 |
1% |
|
US Cotton Production (million bales) |
13.0 |
12.9 |
-1% |
|
US Cotton Mill Use (million bales) |
3.4 |
3.4 |
0% |
|
Global Cotton Trade (million bales) |
36.9 |
42.9 |
16% |
The outlook for the cotton market is cautiously optimistic, with global production exceeding mill use and US production projected to rebound in 2024-25. However, concerns remain regarding low domestic mill use in the US and potential price fluctuations influenced by various macro-economic factors.