SUMMARY OF THE OUTLOOK FOR COTTON

摘要

Low cotton prices are expected to persist through the rest of 2014/15 when fanners in the Northern Hemisphere make their planting decisions. As a result, world cotton area in 2015/16 is projected down 6% to 31.6 million hectares. Assuming a 5-year world average yield of 777 kg/ha, world cotton production is forecast to fall 6% to 24.6 million tons, which is the lowest level since 2009/10. At the same time cotton prices have fallen, prices for competing crops such as maize and soy have recovered fromprice downturns last September and October, making cotton much less attractive to plant in 2015/16. Although the Indian government raised its minimum support price in 2014/15, for many farmers the price was still too low compared to production costs. Lowreturns for cotton and better pricing for competing crops will cause more farmers to switch from cotton in 2015/16. Area in India is forecast down 5% to 11.6 million hectares. Assuming yield is similar to the last few seasons, production could reach 6.5million tons, making India the largest producer of cotton for the second consecutive season. In China, area is projected to fall for the fourth consecutive season by 10% to 3.8 million hectares. Lower prices paid through the new subsidy policy, rising production costs, and uncertainty over returns will all impact Chinese farmers' planting decisions. Production in China is forecast down 11% to 5.7 million tons, the lowest level since 2003/04. In the United States, the new STAX program will be in full operation for the first time in 2015/16. Uncertainty over returns under the new program and low cotton prices relative to competing crops may make farmers less enthusiastic to plant cotton this season. Area in the UnitedStates is expected to contract 10% to 3.6 million hectares, and production will decline 7% to 3.3 million tons in 2015/16. Low prices in Pakistan and the slow start to procurement by the Trading Corporation of Pakistan prompted many farmers ending cotton harvesting early to plant wheat instead. The lack of enthusiasm for cotton is likely to persist into planting time for 2015/16. Area in Pakistan is expected to fall by 5% to 2.7 million hectares, and production by 9% to 2.2 million tons.