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US cotton demand up 12 per cent

US cotton demand, including mill use and exports, is expected to increase 12 per cent in 2016-17, as exports are projected to rebound.  In 2015-16, the limited supplies—particularly of higher quality cotton—and sharply lower imports by China reduced demand to a 30-year low.

For 2016-17, exports will continue to account for 74 per cent of the total demand. The increase in exports is likely to push US share of global trade in 2016-17 to 32 per cent, up from last season’s 26 per cent, but similar to the share recorded in 2014-15.

However, US cotton mill use for 2016-17 is estimated to remain flat, supported by the continued demand for US cotton textile product exports. With US cotton production expected to exceed demand in 2016-17, ending stocks are projected to increase from the current season. Cotton stocks are forecast at 4.7 million bales on July 31, 2017.

US cotton production is forecast at 14.8 million bales, 15 per cent above the final 2015 estimate. The 2016 cotton area is expected at 9.56 million acres, one million acres above 2015. The higher planted acreage is largely due to a return of the area that was prevented from being planted last season due to wet conditions. In addition, relative prices favor cotton slightly over competing crops.

US cotton harvested area for 2016 is projected at 8.8 million acres, nine per cent above the 2015 estimate of 8.1 million acres.