LONDON--Several reports from the United States Department of Agriculture forecast a promising future for cotton production in several markets for the global cotton industry, while others face an upward climb hoping to break out of a long slump in 2017. These reports are some of this week’s featured stories on BizVibe. BizVibe is the world’s smartest B2B marketplace and allows users to connect with over seven million companies around the globe.
World cotton stocks are expected to decrease, but global cotton production will rise
The global cotton market will face some challenges, such as increases in farm labour costs and increasing competition for resources. The latest United States Department of Agriculture (USDA) report estimates that global cotton stocks will drop by 10% during 2016/17 to their lowest level since 2011/12.
However, production of cotton will increase on a global scale. Turkey, Pakistan, the US, and Brazil, amongst other countries, are all expected to increase their cotton production, and India will remain the world’s largest cotton producer with a steady output of 5.8 million tons.
Cotton planting area and production in Turkey to rise by 15%
Turkey’s cotton industry is expected to recover from years of limited production. According to the USDA, both cotton planting area and cotton production in Turkey will increase by approximately 15% this year, totalling 425,000 hectares of planting area and 650,000 tons of total cotton production. This growth is primarily driven by higher cotton prices as well as more local farmers switching to planting high-return crops such as cotton.
Currently, the cotton imported from the US accounts for almost 40% of Turkey’s domestic cotton market, but Turkey’s cotton imports are decreasing. Turkey’s cotton imports dropped to 313,000 tons during the first five months of MY 2015. Overall, many industry experts believe that Turkey is expected to remain as a net cotton importer in near future due to the large textile industrial capacity.
Egypt’s cotton production decreasing, hoping to rebound
Due to fluctuations in global cotton prices and the Egyptian government’s removal of financial support for local farmers, the cotton industry in Egypt has been on a continuous decline over the last decade. The USDA predicts that it will hit an all-time production low of just 160,000 bales of cotton in 2016/17, a decrease of more than 53% from the previous year’s production of 320,000 bales.
There is also less global demand for previously stable textiles like Egyptian cotton, accounting for only 2.5% of global textile and fabric consumption. However, experts from the International Cotton Advisory Committee argue that Egyptian cotton’s downward production should not deny the fact that there is still a high demand in the international market. If Egyptian cotton production increases, the global market still has the ability to absorb it because despite the market’s recent slump, Egyptian cotton still remains some of the best cotton in the world.
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