Zheng Cotton Fell! The World's Cotton Market "Three Giants" Understand!

China, the United States and India are the three most influential countries in the world's cotton market. Among them, China's cotton production and consumption ranked first in the world, but in recent years its first cotton producing status has been replaced by India. Because of its large demand, China has very few net exports of cotton per year; while nearly 80% of the US cotton output is used for export trade, it is the world's largest cotton exporter and ranks third of the world's output. India's cotton output ranks first in the world and consums second of the world's total. As China and India play an important role in the cotton market, their output, consumption and export policies have great impact on global cotton prices.

Supply and demand of global cotton market

yield

Global cotton production decreased by 19% over the same period of 2015/2016, and increased production for two consecutive years in 2016/2017 and 2017/2018. The global cotton output in 2017/2018 was 26 million 950 thousand tons, and the 2018/2019 year decreased by 4% to 25 million 980 thousand tons. In the year of 2019/2020, it is expected to increase 5% to 27 million 380 thousand tons over the same period. Among the countries in the world, China, India and the United States are the main cotton producers. Their output accounts for 60% of the world's total. In 2009/2010, China accounted for 31% of the world's total output, but after 10 years of change, China's cotton production showed a downward trend, and its share was also decreasing. China accounted for only 23% of its output in 2018/2019, almost equal to that in India. India's share increased from 2013/2014 to 2016/2017. The proportion of other years remained basically in a stable range, with little change. The output was increased compared with that of 10 years ago. In recent years, cotton production in the United States showed an overall growth trend, accounting for a marked increase compared with 10 years ago.

The picture shows global cotton output (10000 tons) and year-on-year.

consumption

The consumption of global cotton in the two years of 2010/2011 and 2011/2012 is decreasing year by year, but since the year of 2012/2013, the global cotton consumption has recovered and consumption has increased year by year. The global cotton consumption in 2018/2019 is 26 million 360 thousand tons, 1% less than that in 2017/2018. USDA forecasts that the global cotton consumption in will be 27 million 50 thousand tons, an increase of 3% over the same period last year. According to the estimated value released by USDA, consumption of countries in 2019/2020 is ranked by size in China, India, Pakistan, Vietnam, Bangladesh, Turkey and so on.

The picture shows global cotton consumption (10000 tons).

Trade

According to the size of imports, the countries in the world are China, Vietnam, Bangladesh, Indonesia, Turkey, Pakistan and so on. The major exporters of cotton are the United States, Brazil, India, Australia and so on.

Stock

From 2010/2011 to 2014/2015, the world's cotton production is larger than the global cotton consumption. However, due to the significant reduction in cotton production and the steady growth of consumption in 2015/2016, the gap between cotton production and consumption has been 3 million 510 thousand tons. According to the data of USDA in 2018/2019, there is still a gap of 380 thousand tons between production and consumption.

The end inventory of global cotton increased from year 2009/2010 to 2014/2015 year by year, showing a trend of cumulative inventory. 2015/2016's year-end inventory stopped accumulating further, down 15% compared with the same period last year, but the fluctuation of cotton final inventory in certain interval ranges from 2016/2017 to 2019/2020, but little change. Accordingly, the ratio of consumption to consumption will increase first and then decrease.

Cotton supply and demand in the US

Growth climate

The climate zone is affected by the Labrador cold current and the northern cold air, which is relatively cold in winter, the summer is mild and rainy, the annual average rainfall is 1000 millimeters, the annual average precipitation is about 1500 millimeters, the annual mean precipitation is 1500 millimeters, the central plain is the continental climate zone, the winter is relatively cold, the summer is hot and rainy, the annual average precipitation is 1000 - 1500 millimeters, the western plateau is the inland climate zone, the annual dry and the temperature difference is big, the annual average precipitation is below 500 millimeters, the precipitation in the plateau desert area is even less than 250 millimeters. The United States is vast in territory, mainly for East-West directions and temperate in the northeast coast.

Agricultural land in the United States accounts for about 10% of the world's agricultural land, about 6 billion 450 million mu, and has abundant grain production. It is the world's leading grain exporter and accounts for about 20% of the world's grain output.

Distribution in production area

The cotton planting areas in the United States are mainly divided into four regions, namely, the southeastern region, the central and southern regions, the southwest and the western regions. First of all, the southeast region, which accounts for 21% of the total output of the United States, grows from the beginning of April to the beginning of September. The harvest period is from the end of September to the end of December. Second is the central and southern region, cotton production accounted for 17% of the total U.S. output, the growth cycle from mid April to early September, the harvest period is from the end of September to the beginning of December, the region's cotton production is mainly used for domestic consumption. Third for the southwest region, cotton production accounts for 60% of the total output of the United States. The seeding date is at the end of February, and the harvest period is from the end of July to the middle of September. The last area is the western region, the main production of high-grade cotton varieties, starting from February to September, the harvest period is from the end of September to the beginning of December. Compared with the other three cotton producing areas, the western region because of the climate is dry, all cotton in the area needs irrigation.

yield

In 2018/2019, due to the impact of early dry weather and hurricane in the three quarter, the rate of US cotton upland increased to 27.62%, making us cotton output down 12% to 4 million tons over the same period. By the end of June, the planting of American cotton has basically been completed. According to USDA data, in the end of June, the sowing area of the United States cotton in 2019/2020 was 13 million 720 thousand acres, which was 60 thousand mu less than the intention planting area at the end of March, but increased by about 200 thousand acres compared with last year. In the new cotton planting period, the weather is not bad. The excellent and good rate of cotton growth has been increasing and higher than last year. The rate of abandonment is expected to drop sharply compared with the same period last year, but the average cotton yield per unit area decreased by 2.17% to 947 kg / ha compared with the same period last year. 2019/2020 cotton production is expected to increase by 19.75% to 4 million 790 thousand tons over the same period, or at least 10 years.

Supply and demand of cotton in India

Growth climate

The India plain covers 40% of its land area, even if it is mountainous and plateau, with an elevation of not more than 1000 meters, convenient transportation, tropical monsoon climate and alluvial soil suitable for agricultural production and tropical black soil, so that crops in India can grow all year round. The superposition of various factors has made India one of the largest grain producing countries in the world. The area of cultivated land accounts for about 10% of the global arable land and its area is about 2 billion 400 million mu. At present, India has become the world's leading exporter of agricultural products. However, due to the tropical monsoon climate in India and the instability of southwest monsoon, the time distribution of precipitation in India is uneven, and it is more vulnerable to floods and droughts. This makes India's grain output fluctuate considerably. Most of India belongs to the tropical monsoon climate, which is relatively hot throughout the whole year. The Western Thar desert is a tropical desert climate. The summer monsoon is strong. The rainy season is concentrated in 6 to October every year, and the dry season is 3 to May every year. In winter, due to the blocking effect of the Himalaya mountains, there is no influence of cold current or cold high pressure on the south.

Distribution in production area

India's cotton production is mainly concentrated in the northern and central parts of the country. In the northern part of Gujarat, its output accounts for 25.07% of the country's total. It is India's largest cotton production base, followed by Maharashtra, which belongs to the northern region. Its output accounts for 23.74% of the country's total. The third place is the trun Gan Bang state, which accounts for 12.15% of the total output in the central region.

yield

India cotton harvest area has declined significantly in 2016/2017, but from the beginning of 2017/2018, India cotton harvest area has been maintained at 12 million 600 thousand hectares. In the year of 2018/2019, due to high temperature and insect pests, cotton production per unit in India dropped 8.6% to 458 kg / ha compared with the same period last year, resulting in a reduction of 9% to 5 million 770 thousand tons of cotton output in India compared with the previous year. The cotton yield per unit in India in 2019/2020 is expected to increase to 501 kg / HA in the year of 2017/2018, and the cotton production is expected to increase 9% to 6 million 310 thousand tons over the same period last year, that is, to return to the production level of 2017/2018.

The picture shows cotton planting area in India (unit: 1000 hectares) and unit yield (unit: kg / HA).

Cotton supply and demand in China

Planting area

There are three major cotton producing areas, namely Xinjiang cotton region, the Yellow River River Basin cotton region and Yangtze River valley cotton region. The cotton planting belt is generally distributed at 18 to 46 degrees north latitude, 76 to 124 degrees east longitude, and the temperature is more than 10 degrees C. According to the survey report of cotton sowing area in 2019, the actual sowing area of cotton in China in 2019 was 47 million 943 thousand mu, a decrease of 308 thousand mu compared with that of the previous year, with a decrease of 0.6% and a total production of 5 million 730 thousand tons.

Specifically, the actual sowing area of cotton in the the Yellow River river basin is 6 million 919 thousand mu, a decrease of 666 thousand mu compared with that of the previous year, with a reduction of 8.8%. The sowing area of the middle and lower reaches of the Yangtze River is 4 million 906 thousand mu, a decrease of 383 thousand mu compared with that of the previous year, with a reduction of 7.2%. The sown area of the northwest inner cotton area is 35 million 681 thousand mu, an increase of 772 thousand mu compared with the same period, an increase of 2.2%. Among them, the actual sowing area of Xinjiang was 35 million 313 thousand mu, up 2.2% over the same period.

supply

The output of cotton in China decreased from 2013/2014 to 2015/2016. In recent years, the output of cotton increased slowly from low level, and 6 million 40 thousand tons of cotton were expected to be produced in 2019/2020. Imports continued to shrink from 2012/2013 to 2015/2016, slowly increasing in recent years, but still below the volume of imports in 2014/2015.

consumption

Cotton consumption experienced a first and then increase in ten years, but consumption has always been above production, and the gap has existed for a long time. From 2010/2011 to 2013/2014, domestic cotton consumption has been decreasing year by year, and the gap between production and consumption is decreasing year by year. Cotton consumption has recovered from 2015/2016 to 2018/2019, consumption has slowly picked up, and the gap has also widened.

Stock

China's domestic cotton terminal inventory increased year by year from 2010/2011 to 2014/2015, and reached a record high of 14 million 480 thousand tons in 2014/2015. After that, the process of inventory was started, but business inventories increased year by year.

The end of the global cotton inventory is also changing from the inventory stage to the inventory stage, which is almost the same as that in China. However, if China is eliminated, the global end inventory will no longer have this obvious trend. This shows that China's cotton inventory affects the cotton inventory to a large extent, and the analysis of China's cotton inventory changes has a guiding role in judging the global changes.