20151214-USDA-Cotton_and_Wool_Outlook_2015.10.14_19页_923kb

Cotton and Wool Outlook Summary

Core Content

This report from the Economic Research Service (ERS) of the U.S. Department of Agriculture (USDA) provides an overview of the global and U.S. cotton and wool markets for the 2015/16 season. It outlines production, demand, trade, and stock trends, emphasizing the impact of trade policies and market dynamics on the industry.

Main Points

Global Cotton Outlook

• World cotton stocks are expected to decline by 4 percent to 107 million bales in 2015/16, marking the first decline in 6 years.
• The decline in global stocks is primarily due to China's new policies limiting raw cotton imports, which have reduced its own stocks by 4 percent, the first reduction in 5 seasons.
• China remains the largest cotton stockholder with 65.3 million bales, equivalent to nearly 2 years of mill use.
• India is projected to have 13.5 million bales of stocks, or about 13 percent of global stocks, compared to China's 61 percent.
• U.S. stocks contribute 3 percent of the total, while the rest of the world accounts for 23 percent.
• The stocks-to-use ratio is forecast at 22 percent for the U.S. in 2015/16, down from 25 percent last season.

U.S. Cotton Outlook

• 2015 U.S. cotton production is estimated at 13.3 million bales, a marginal decrease from the previous month's forecast and 3 million bales below the 2014 crop.
• Upland cotton is forecast at 12.9 million bales, below both last season and the 5-year average.
• Cotton Belt regions all forecast lower production, with the Southwest at 6 million bales, Southeast at 4.3 million bales, and Delta at 2.2 million bales.
• The U.S. harvested area is estimated at nearly 8.2 million acres, the lowest in recent years.
• The national yield is forecast at 784 pounds per harvested acre, the lowest in 7 years.
• Extra-long staple (ELS) production in the U.S. is forecast at 451,000 bales, down 20 percent from 2014.

Global Cotton Demand and Trade

• Global cotton mill use is expected to rise slightly to 112.3 million bales in 2015/16, but growth is constrained by competition from manmade fibers.
• China is the world's leading cotton mill user, with 33.5 million bales projected for 2015/16.
• India is forecast to have 25.5 million bales of cotton mill use, a record.
• Global cotton trade is expected to decline for the third consecutive season due to reduced imports from major producers like the U.S., Brazil, and Uzbekistan.
• U.S. exports are projected to decline by 1 million bales, while India and Australia are expected to see slight increases.

Global Cotton Production

• World cotton production is forecast at 107.4 million bales in 2015/16, the lowest in 6 years.
• China and Pakistan are the main contributors to the production decline, with China's production forecast at 25.3 million bales (16 percent below the previous season) and Pakistan's at 9.5 million bales (10 percent below the previous season).
• Brazil and Australia are also projected to see declines in production, while Mali is expected to increase its production to a record 1.2 million bales.

U.S. Textile Industry Trends

• U.S. textile employment grew for the first time in over 20 years in 2014 and is expected to continue growing in 2015.
• U.S. textile employment has declined every year from 1995 to 2013, but the rate of decline has slowed significantly in recent years.
• Textile employment has been inversely related to the import share of U.S. household fiber consumption, which has increased due to changes in trade policy and comparative advantage.
• Apparel industry employment continues to decline, but at a slower rate (3.3 percent) than in previous decades (11 percent).

Key Information

• Cotton prices are expected to fall in 2015/16, with the Cotlook A-Index projected to be slightly below the 2014/15 average of 71 cents per pound.
• China's import policies have significantly impacted global cotton trade, leading to a reduction in raw cotton imports and a subsequent decline in global stocks.
• India and Vietnam have seen increased mill use due to China's growing demand for cotton yarn.
• U.S. textile mills are expected to consume 3.7 million bales of cotton in 2015/16, a 3.5 percent increase from the previous year.
• U.S. total manufacturing employment has been relatively stable compared to the import share of manufactured products, only declining sharply during economic downturns.

Summary

The report highlights a global shift in cotton production and trade dynamics, with a notable decline in stocks and production in 2015/16 due to policy changes in China and other countries. U.S. production and stocks are also expected to decline, but mill use is on the rise, signaling a potential recovery in the U.S. textile industry. The report also underscores the long-term trend of shifting production and employment from the U.S. to other countries due to trade policies and comparative advantage, as well as the increasing role of manmade fibers in the market.