Cotton Demand Forecast Will Increase By 100 To 33 Million Packages.

2016/3/2 17:27:00 37

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Last Friday, the US Department of agriculture (USDA) said at the Agricultural Outlook Forum, China's 2016-17 year.

cotton

The demand estimate will increase by 1 million to 33 million packs.

Over the past six years, China's cotton consumption has decreased by 1/3.

However, China's cotton demand is increasing or will not prevent international demand.

Cotton price

Further decline.

This will be the first increase since 2009-10, when demand recorded a record high of 50 million bags a year.

Since then, the Chinese government has provided guarantee and price policy for growers, making domestic prices far higher than international prices.

Cotton mill

Uncompetitive.

USDA said: "in the past seven years, China's cotton price support policy has led to a decline in cotton consumption."

Last year's cotton throwing and storage failed to attract large purchases, and the market was willing to accept lower quotations, which would stimulate consumption growth.

"In 2016-17, the sales volume of reserve cotton is expected to be higher, because the gap between output and consumption is widening, and indications are that the price of reserve cotton will decline."

USDA said.

However, the additional supply is expected to be unfavourable to the price. The CotlookA spot price index shows that the average cotton price in 2016-17 is 67 cents per pound, which is 2 cents lower than that in 2016-16.

USDA believes that global demand growth is weak, polyester and other man-made fiber prices are low, as well as China's inventory policy pressure, and so on, to combat cotton prices prospects.

China's fear of a huge sell-off of cotton reserves is considered an important reason for New York's cotton futures to fall to its lowest level since 2009 this week.

USDA estimates that China's cotton reserves are 49 million bales.

However, USDA also predicts that China's cotton imports will stop falling, which is another big disadvantage for the market. USDA estimates that China's imports will stabilize at 5 million bales in 2016-17.