Global Cotton Production Forecast Will Decrease In 2012/13

According to the US Department of agriculture, global production forecast for 2012/13 dropped 6% from last year to 115 million 300 thousand bales.

The revised forecast shows a decrease of 1 million 400 thousand packs since last month, because of the world

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Australia, Argentina and Brazil are expected to reduce cotton planting area (hence production).

Australia and Brazil expect to produce 4 million 250 thousand and 7 million bags respectively in 2012/13, 10% and 23% respectively from the previous year.

The harvest area in Australia is expected to fall to 475000 hectares in 2012/13, while the area in Brazil is expected to decrease by 23% to 1 million 100 thousand hectares.

China and India are expected to produce 30 million 500 thousand packages and 25 million packages, representing a decrease of 9% and 6% respectively over the previous year.

Pakistan's 2012/13 production is expected to decline 6% from last year to 10 million bales.

The United States is the only country that produces more cotton in the last 2012/13 than last year, and is expected to increase by 9% to 17 million packs because of severe drought last year.

The global harvest area is estimated at 33 million 700 thousand hectares, a decrease of 6% over the previous year, while the unit yield is estimated at 746 kg / ha, which is similar to that of 2011/12.

The world's textile stocks will rebound at the end of 2012/13.

Although world cotton consumption in 2012/13 decreased by one million pack (1%) from last month, the forecast of 109 million packages is still nearly 3% higher than that of last year.

China expects to consume 40 million bales of cotton in 2012/13, 2% less than last year.

If so, this will be the lowest amount of textile mill in 8 years.

The reduction in consumption in China will be offset by the increase in the amount of India textile mill. 2012/13 cotton consumption in India is projected to be 21 million 300 thousand packs, an increase of 6% over the previous year.

In Pakistan and Turkey, the volume of textile mills in 2012/13 is expected to be 11 million and 5 million 600 thousand packs respectively, up 7% and 6% respectively from the previous year. The consumption of Brazil is expected to be close to 4 million 300 thousand packs, 6% higher than that of last year, while the consumption of 2012/13 in the United States is expected to increase by 3% to 3 million 500 thousand packages.

Thailand expects to spend nearly 1 million 600 thousand bags in 2012/13, up 22% over the previous year, because the amount of Thailand textile mill has recovered from the severe floods experienced in 2011/12.

2012/13's global final inventory is expected to hit 74 million 500 thousand Bao Xingao, an increase of 11% over last year, and production is expected to exceed consumption.

It is not surprising that the inventory to consumption ratio is expected to increase to 68%, which will weaken global cotton prices.

China's 2012/13 stocks are expected to increase by 31 million 300 thousand at the end of the 2012/13 period, up 15% from the previous year. Therefore, the world's largest cotton consuming country will account for 42% of the world's final inventory.

India and Brazil are expected to account for 12% and 10% of the global 2012/13 end inventory, respectively.

The United States, Pakistan and Australia are expected to account for 7%, 5% and 4% respectively.