Cotton - OECD-FAO Agricultural Outlook 2013-2022

 

Cotton will continue to lose market share to man-made fibres. China’s cotton production is expected to decline 17% while production in India is projected to increase 25%, positioning it as the world’s largest producer.

Market situation

 

World cotton prices in 2012 were influenced by competing forces, with world demand rising after a two-year decline and elevated stock levels creating uncertainty about future prospects. High prices for grains and oilseeds helped sustain cotton prices, which nonetheless were below year-earlier for virtually the entire marketing year.

World cotton stocks rose for the third consecutive year, but most of the increase was accounted for by official reserve building in China. Consumption continued to decline in China, the world’s largest industrial consumer by a large margin, but rose in a number of other countries as China’s yarn imports rose sharply.

Lower world production is widely foreseen in the coming year, with early reports indicating an intention of US farmers to plant 4 mha, a 19% decline. China’s area is also expected to decline, despite a relatively high support price.

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Projection highlights

  • World cotton use is expected to grow at a rate slightly below the long term average of 1.9% over the coming decade. In 2007, world consumption reached a peak of 26.7 Mt, and following significant declines during 2008-11   and with a relatively slow recovery   this peak is not likely to be surpassed again until nearly 2022. Increased demand by India’s textile industry account for about 70%, the expected increase in consumption from the base period.

  • World production is expected to grow marginally more slowly than consumption, reflecting the large global stocks that accumulated between 2010 and 2012. World cotton area grows throughout the outlook, but remains below recent peaks seen in 2004 and 2011. Yields rise around the world, but global average yield grows very slowly as global output switches from relatively high-yielding countries to relatively low-yielding ones.

  • World trade declines in the outlook, with exports in 2022 3.2% below those in the base period.  The United States retains its position as the world’s largest exporter accounting for about one-third of world trade. LDC Sub-Saharan Africa replaces India as the world’s second largest source of cotton exports.

  • China retains its position as the world’s largest import market for cotton throughout the Outlook.  But, by 2022 China’s share of world trade is foreseen at about half of its base period 41% share.  Bangladesh and Viet Nam each nearly double their share of world trade by 2022.