Cotton Advisory Committee : Southern Hemisphere 2015/16 Plantings in Full Swing

Cotton plantings for the Southern Hemisphere in 2015/16 season started in September 2015 and will continue through the start of 2016. Production in the Southern Hemisphere usually accounts for 8 to 10% of total world production, but this share is expected to increase to 11% in 2015/16. Despite low international cotton prices, growers in the Southern Hemisphere may increase planted area by 1% to 2.9 million hectares. Southern Hemisphere production in 2015/16 is projected down 2% to 2.5 million tons. Cotton area in Australia is projected to more than double to 300,000 hectares, with a greater percentage of cotton being planted on dryland area. Assuming a 27% decrease in the average yield to 1,867 kg/ha, production in Australia is forecast to increase by 11% to 560,000 tons in 2015/16. Brazil on the other hand is expected to decrease area by 4% to 952,000 hectares, and production may reach just under 1.5 million tons. Production in the Northern Hemisphere is estimated at 20.6 million tons in 2015/16. India's production of around 6.2 million tons accounts for around 30% of production in the Northern Hemisphere. China's production is estimated at 5.3 million tons, down 19% from 2014/15 and 35% from the record of 8.1 million tons achieved in 2007/08. After achieving a record of 812 kg/ha last year, the average yield in Pakistan may decrease by 22% to 637 kg/ha due to adverse weather, increased pest pressure from whitefly and pink bollworm, and the high cost of inputs discouraging farmers from better crop management. Production is estimated at 1.7 million tons on an area of 2.7 million hectares. A 13% reduction in harvested area in the United States coupled with lower yields due in part to excessive rains in autumn are expected to lead to a fall in production of 18% to 2.9 million tons. World cotton mill use will likely remain unchanged from 2014/15 at 24.3 million tons. International cotton prices have remained similar to those registered last season, while polyester prices have continued to fall. After decreasingly steadily since 2010/11, China's mill use was stable at 7.5 million tons in 2014/15, but is projected to decline by 3% to 7.3 million tons in 2015/16. India's mill use is forecast to increase by 3% to 5.5 million tons while Pakistan's may decrease by 12% to 2.2 million tons. While cotton consumption is expected to overtake production in 2015/16, the global supply of cotton is still abundant. World stocks at the end of 2015/16 are forecast to be 20.6 million tons, 58% of which will be in China. World imports are projected to decline in 2015/16 by 4% to 7.3 million tons. While imports outside of China are forecast to increase by 6% to 6.1 million tons, this rise will not offset the decline in China's imports, which are expected to decrease by 34% to 1.2 million tons. The ICAC Secretariat sends their best wishes to all in the cotton and other natural fiber industries for the New Year.

WORLD COTTON SUPPLY AND DISTRIBUTION
	2013/14	2014/15	2015/16		2013/14	2014/15	2015/16
					Changes from previous month
	Million Tons				Million Tons
Production	26.28	26.23	22.89		0.01	0.06	-0.21
Consumption	23.88	24.22	24.33		0.00	-0.01	-0.05
Imports	8.67	7.60	7.31		0.00	0.00	-0.04
Exports	8.99	7.70	7.31		0.00	0.00	-0.04
Ending Stocks	20.11	22.03	20.59		0.03	0.11	-0.05
Cotlook A Index*	91	71	71

* The price projection for 2015/16 is based on the ending stocks/consumption ratio in the world-less-China in 2013/14 (estimate), in 2014/15 (estimate) and in 2015/16 (projection), on the ratio of Chinese net imports to world imports in 2014/15 (estimate) and 2015/16 (projection). The price projection is the mid-point of the 95% confidence interval: 63 cts/lb to 81 cts/lb.