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USDA Cotton: World Markets and Trade

14 September 2015

USDA Cotton: World Markets and Trade - 14 September 2015USDA Cotton: World Markets and Trade - 14 September 2015

USDA Cotton: World Markets and Trade Reports

Global Use Forecast Lowered; Remains Above 2014/2015

The growth rate for global consumption of cotton is revised downward to 1.7 percent from previous estimates of 2.5 percent due to concerns about weak consumer demand. This substantially reduced growth rate forecast nonetheless remains an acceleration in consumption growth relative to the 1.3 percent growth in 2014/2015. South and Southeast Asia continues to exhibit stronger growth than the world average, though well below last year. This forecast growth rate reduction is most notable in Indonesia, India, and Thailand. Other regions are forecast to trim previous years’ losses, most notably in North and South America where steep declines are expected to slow, and some countries, such as the United States, are forecast to experience growth. East Asian consumption is forecast flat, especially as Chinese consumption projections are unchanged.

Accumulating yarn stocks, reduced yarn margins, and uncertainties regarding income growth in developing countries are indicative of the challenges currently facing global cotton consumption. However, world macroeconomic indicators are still positive. Raw cotton prices stabilized in 2014/2015 relative to the preceding period of high and volatile prices, and relative to polyester prices. Renewed price stability and continuing global surpluses imply no-less-favorable conditions for spinners in 2015/2016 than in 2014/2015. For these reasons, consumption growth in 2015/2016 is expected to exceed 2014/2015’s estimated growth rate.

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