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NCC predicts 2016, a challenging year for US cotton

The National Cotton Council’s (NCC) Cotton Economic Outlook 2016 says, this year will also be challenging for US cotton industry. Export markets continue as the primary outlet for US raw cotton fiber. China, traditionally US cotton’s largest export market, is importing considerably less in the 2015 marketing year - US sales to China are about 80 per cent less than this time last year.

The NCC sees total US exports at 9.5 million bales for the current marketing year, down 15.5 per cent from 2014. This estimate may prove to be optimistic as the weekly pace will need to increase throughout the remainder of the 2015 marketing year to reach 9.5 million bales. NCC’s estimate reflects the situation in China where massive cotton stockpiles and expectations for limited quota mean that raw cotton imports by China are expected to fall further in 2016 to 4.75 million bales, down from 5.5 million in 2015. China’s mill use also is projected to decline in 2016. As per the NCC projection, a 2016 U.S. crop of 14 million bales, with 13.4 million upland bales and 595,000 extra-long staple bales produced on 9.1 million acres. NCC - projected U.S. off take of 13.8 million bales in 2016 still would result in an increase in ending stocks of 193,000 bales.

Sluggish cotton demand, smaller imports by China, weakness in other commodity markets and a stronger dollar are prevalent factors in the current price climate.