By Our Staff Reporter MUMBAI, MAY 27
According to USDA’s first projection for the 2013 crop, U.S. cotton production is forecast at 14.0 million bales, 19 percent below the final 2012 crop estimate. Based on the Prospective Plantings report, 2013 cotton area is expected to be 10.0 million acres—also down 19 percent from 2012 and the lowest in four seasons.
The lower planted area is the result of higher competing crop prices relative to cotton. While drought conditions continue across much of the cottongrowing area of Texas, wet conditions have been prevalent in the Delta States—these conditions have led to delays in 2013 crop planting. As of May 12th, only 23 percent of the U.S. cotton area had been planted, compared with 46 percent in 2012 and a 5-year average of 38 percent.
Texas has planted only 20 percent of its crop, compared with an average of 31 percent. For the Delta States, plantings have ranged from 3-29 percent complete, compared with the 5-year average of 21-81 percent. Weather conditions during the next month and throughout the growing season will affect acreage, and more importantly, cotton production.
The initial 2013 abandonment is based on the 2010-12 crop average abandonment, weighted by region; the Southwest abandonment is projected at 25 percent, reflecting the current drought conditions. Overall, the U.S. abandonment rate is projected at 16 percent, which is a harvested area projection of 8.4 million acres for the 2013 season—the lowest in four years.
The national yield projection of 800 pounds per harvested acre is based on the 2010-12 crop average yields, weighted by region. The initial estimate is well below the record yield of 887 pounds per harvested acre in 2012, but similar to both the 2010 and 2011 seasons.
Area for both upland and extra-long staple cotton is forecast to decline in 2013. For the upcoming season, upland cotton acreage is expected to decline in each Cotton Belt region for the second consecutive year.
Based on the Prospective Plantings report, the Southwest’s cotton planted area is forecast at 5.7 million acres, down considerably from the previous 2 years. However, the region represents 58 percent of the total upland area, one of the highest in more than 3 decades.
This share has also expanded in the Southeast, where 26 percent of the 2013 crop is expected to be planted (2.6 million acres). In the Delta, cotton area is only expected to reach 1.3 million acres, with a share of 13 percent—both record lows.
The West accounts for only 3 percent of the U.S. upland acreage in 2013, and continues to see cotton area move into alternative crops. Total Demand To Decrease in 2013/14 U.S. cotton demand in 2013/14 is expected to decline 10 percent to 15.0 million bales, compared with nearly 16.7 million bales estimated for 2012/13.
A smaller U.S. cotton supply and reduced foreign import demand—particularly from China— are projected to keep demand for U.S. cotton lower, near that of 2011/12.
Exports are forecast to decline, while mill use is expected to increase slightly in 2013/14. Exports continue to make up the bulk of U.S. cotton demand and, at 11.5 million bales, 2013/14 exports are forecast to account for 77 percent of the total.
In 2012/13, U.S. exports will expand from the year before as China continues to import more cotton than first anticipated; the U.S. share of world trade in 2012/13 is forecast at 29 percent.
For 2013/14, world trade is expected to decrease to its lowest level in three seasons, but the U.S. share of trade is projected to remain at 29 percent as foreign supplies outside China are forecast to decline in 2013/14.
Also, China is expected to reduce imports in 2013/ 14, and is projected to hold more than 50 percent of the world’s cotton stocks in its national reserve by season’s end. U.S. cotton mill use for 2013/14 is expected to reach 3.5 million bales, 3 percent above the latest 2012/13 estimate (3.4 million bales).
With modest growth expected in global mill use, demand for U.S. cotton textile products is also expected to see some improvement in 2013/14, as consumer demand for cotton apparel follows the movement in the global economy.
With U.S. cotton demand projected to exceed production for the first time in 3 years, 2013/14 ending stocks are forecast to decrease from 2012/13. Stocks are projected at 3.0 million bales on July 31, 2014—one million bales below the beginning level.
The stocks-touse ratio is estimated at 20 percent, down from 2012/13 but similar to the most recent 4-year average. Based on these initial supply and demand projections, the 2013/14 U.S. upland farm price is expected to range between 68 and 88 cents per pound. At the mid point of the range, the farm price would be 6 cents above the 2012/13 estimate of 72 cents per pound.
2012/13 Supply and Demand Adjusted in May U.S. cotton production for 2012/13 was revised up marginally this month as the National Agricultural Statistics Service released its final cotton production estimate of 17.3 million bales (see table 10 for final estimates).
The U.S. cotton export estimate was also increased in May as the recent shipment pace suggests exports of nearly 13.3 million bales. These supply and demand adjustments are also reflected in a lower ending stock estimate, now forecast at 4.0 million bales in 2012/13. The implied stocks-to-use ratio is 24 percent, the highest since 2008/09.
U.S. Cotton Textile Trade Update:
U.S. cotton textile trade during the first quarter of 2013 increased from a year earlier. During January-March 2013, cotton product imports approached 2.0 billion (raw-fiber equivalent) pounds, 6 percent above the amount imported during the same period in 2012. U.S. cotton textile and apparel exports for the first 3 months of 2013 were 419 million pounds, slightly above that of a year earlier.
As a result, the U.S. cotton product trade deficit for first-quarter 2013 approached 1.6 billion pounds, above the 1.4-billion-pound deficit for the comparable period in 2012 but similar to that of 2011.
The five leading suppliers to the U.S. market—China, India, Pakistan, Bangladesh, and Mexico—continue to account for over 60 percent of total cotton product imports. During January-March 2013, these countries accounted for nearly 63 percent of the total, slightly above that of a year earlier, but similar to calendar year 2012.
China continues to account for the largest share (30 percent), although it was below the previous two years. With reduced spinning estimated again in China in 2012/13, India, Pakistan, and Bangladesh each have captured larger shares of the U.S. market.
U.S. cotton product exports remain more concentrated than imports as the top countries have shifted; in 2013, China replaced Canada as the fourth leading destination for U.S. cotton product exports.
During January-March 2013, the top five countries accounted for 81 percent of the total, slightly above both the corresponding period of 2012 and the entire calendar year.
Reduced shipments to four of the top five countries were more than offset by a dramatic increase in shipments to China, which increased more than threefold. U.S. textile shipments to China—mainly cotton yarn— accounted for 10 percent of the total during the first 3 months of 2013, compared with only 4 percent for calendar year 2012.
(Source: Tecoya Trend)