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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


22 October 2013

USDA GAIN: Greece Cotton and Products Update 2013USDA GAIN: Greece Cotton and Products Update 2013

Cotton is a major agricultural crop in Greece, accounting for more than 8 percent of total agricultural output. Greece’s MY 2012/13 cotton production is estimated at 260,000 MT, 10.3 percent down from the previous year due to lower than expected yields because of bad weather and less fertilizer used. Greece is a major cotton exporter. Turkey was the main destination for Greek cotton during MY 2011/12 representing approximately 35 percent of total exports.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Production

Cotton is a major agricultural crop in Greece, accounting for more than 8 percent of total agricultural output. More than 75,000 farmers grow cotton, producing about 80 percent of the EU-27 crop. Thessaly, Macedonia, and Mainland Greece are the major cotton-producing areas. Cotton is planted from March 1 to April 15 and the harvest occurs from October 1 to November 30. Most cotton is irrigated and machine harvested.

Greece’s cotton area, yields, and production have declined significantly following Common Agricultural Policy (CAP) reforms which went into effect in 2006 that decoupled payments and reduced support for a number of crops, including cotton. Greece’s MY 2011/12 cotton production has been good, up almost 42 percent from last season due to increased acreage and more effective pest control. Initial delays during the planting period due to constant rainfalls and low temperatures have been offset by warm and sunny days in August and September. Greece’s MY 2012/13 cotton production is estimated at 260,000 MT, 10.3 percent down from the previous year due to lower than expected yields because of bad weather and less fertilizer used. MY 2013/14 cotton area and production are forecast to decline by approximately 22.8 and 15.3 percent respectively, in favor of durum wheat and corn, especially in Thessaly.

There are roughly 30 ginning companies in Greece with a total of about 65 ginning units. About 80 percent of the companies are private and the remainder are cooperatives. The top 5 companies handle about 70 percent of ginning capacity. Greece’s financial crisis has negatively affected the cotton market, creating risks and uncertainty. Without bank assistance, many ginners and cooperatives cannot store their stocks until prices improve. There is also a lot of debate about the survival of cooperatives that used to receive a large percentage of agricultural loans. Moreover, considering last season’s defaults and delivery issues, international cotton merchants have decided to narrow their focus and buy only from the top ginners/exporters based on last season’s performance. Ginners generally do not contract with growers, but compete with each other to purchase the crop. Greek seed cotton prices increased from €0.42-0.43/Kg at the beginning of the season to nearly €0.48/Kg for limited quantities in mid-November.

Consumption

Domestic spinners consume approximately 10 percent of lint production and the remainder is exported. About 58 percent of cottonseed production is exported (mainly to Italy), and the remainder is crushed for oil and oilseed cake, or retained for seed.

Trade

Greece is a major cotton exporter. Turkey was the main destination for Greek cotton during MY 2011/12 representing approximately 35 percent of total exports. Greek ginners are expanding their distribution channels rather than selling only to traditional buyers. Thus, during MY 2011/12 Greece exported huge quantities of cotton to China (63,482 MT) and increased amounts to Indonesia (35,553 MT) and Pakistan (6,636 MT). MY 2011/2012 saw reduced exports to Egypt after the import ban imposed by the Egyptian authorities on 25 October 2011 through Ministerial Decree No. 1864/2011. Small amounts of cotton are imported for blending in the domestic spinning industry.

October 2013

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