Lower imports and production and marginally higher consumption of cotton in China are expected to reduce China’s stocks-to-use ratio in 2015/16. China’s stocks-to-use ratio in 2015/16 is expected to slip to around 170 per cent, down from 190 per cent in 2014/15.

Although these are record high stock levels, China’s stock accumulation policy is not entirely unprecedented. Similar rapid stock run-ups occurred from 1982/83 to 1984/85 as well as from 1993/94 until 1998/99.

In previous cases, high stocks-to-use have usually been reduced by approximately 20 percentage points per year, similar to current 2015/16 forecasts for China.

Slightly lower 2015/16 stocks-to-use ratios are forecast for most major markets outside of China, both importers and exporters.

India’s stocks-to-use are forecast to decline from 48 to 43 per cent, while most other large markets are expected to see declines under five percentage points.

Bangladesh’s and southeast Asia’s stocks-to-use, on the other hand, are projected to remain roughly even or rise slightly.

The US season average farm price is projected at 60 cents a pound, with the mid-point slightly lower than the current season estimate.

For 2014/15, world production and ending stocks also have been reduced, while world trade has been raised on somewhat higher expected Chinese imports and use has been hiked slightly.