The 2023/24 cotton season is unveiling a striking transformation in the global cotton sector. The U.S. cotton forecasts are showing a concerning downtrend with reduced production and the lowest mill use since the late 19th century, while China’s burgeoning influence is reshaping the market in dominant ways.
U.S. Cotton Forecasts for 2023/24
U.S. cotton production is expected to fall by 314,000 bales, reaching 12.8 million, primarily due to a substantial 500,000-bale reduction in Texas. This decline extends to mill use, anticipated to reach a historic low of 1.9 million bales, the least since 1884. Ending stocks are also set to decrease, with projections showing 3.1 million bales, 100,000 bales less than prior estimates. Despite these downturns, the upland cotton season-average farm price remains stable at 77 cents per pound.
Global Cotton Balance Sheet as of December 2023/24
Globally, cotton consumption is on a downward trend, falling by 1.6 million bales, significantly impacted by a 1.0-million-bale reduction in China. Both Turkey and the United States also report diminished forecasts, while Bangladesh shows an increase. The worldwide production landscape is contracting, with decreases in the United States, Turkey, and Mexico, slightly compensated by a rise in Pakistan.
The global trade in cotton shows a slight decline, with China’s increased imports nearly balancing reductions in Turkey, Pakistan, and Bangladesh. Brazil’s exports are expected to decrease by 300,000 bales. World ending stocks are set to increase by 900,000 bales, led by a marked rise in China’s stocks, culminating in total global stocks of 82.4 million bales.
This cotton season is characterized by distinct contrasts and strategic adjustments. The U.S. grapples with a significant reduction in its cotton sector, while China emerges as a dominant force in consumption and stockpiling. This shift represents more than a statistical change; it reflects the evolving dynamics in the global cotton trade. The market shows adaptability in the face of these shifts, paving the way for a transformative period in the global cotton trade. As these trends persist, the cotton landscape worldwide is poised for further substantial changes, with broad implications for producers and consumers across the globe.
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