The global cotton production, trade, use and ending stocks for 2017-18 estimates has been significantly raised by the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA). The United States, Australia, India and Brazil will be the major exporters of cotton.
The FAS forecasts Indonesia, Mexico, Vietnam and Bangladesh will be the four major cotton importers in the next US fiscal, according to an August USDA circular. The US balance sheet has area down but production up on higher yields, resulting in greater exports and ending stocks. The forecast for US season-average farm price remains unchanged at 61 cents per pound.
Sales from China’s state cotton reserve remain strong with cumulative sales since the start of auctions on March 3 this year reaching over 10 million bales recently. The average sale price has been $0.966 per pound, 10 cents higher than the A-Index average of 86 cents during the same period.
About 138,000 bales have been offered for sale each business day in that period in China. Sales have been split roughly equally between cotton from the 2012 and 2013 crops, while sales from the 2011 crop account for only 3 per cent of the total. Purchasing has been evenly split between spinners and traders.
The demand for cotton from Xinjiang has been very strong with over 99 per cent of its cotton being sold, amounting to over 60 per cent of total sales. Cotton from the eastern Chinese provinces was less than 40 per cent of the cotton sold. Sales rates in the eastern provinces greatly vary, depending primarily on the warehousing location, while quality factors, such as length or colour grade, are less influential.