China Leads Global Cotton Stock Decrease

The latest U.S. Department of Agriculture cotton estimates for 2016/17 project world cotton ending stocks to decline 10% from the previous season to 87.3 million bales. With back-to-back reductions projected, the first in seven seasons, global cotton stocks would drop to their lowest level since 2011/12, as China continues to reduce the surplus supplies accumulated during the 2011-14 seasons.

With more than 12 million bales of cotton sold from China’s national reserve during May-September 2016, and plans to resume sales beginning in March 2017, China is progressing to reduce the burdensome stock levels that have affected the global cotton market in recent years. Despite this progress, China’s stocks at the end of 2016/17 (48 million bales) are projected to account for 55% of the world total.
Meanwhile, stocks outside of China are forecast to experience modest increases. In 2016/17, stocks in India are projected at 11 million bales, or about 13% of the total. U.S. stocks are expected to account for 5% of global stocks, while supplies in the rest of the world contribute 27%.

Follow me!