China: Cotton and Products Annual
In MY14/15, China lost its spot as the world largest cotton producer to India. Recent changes in China’s cotton support policy reduced farmer income and lowered domestic cotton production to an estimated 6.5 million tons in MY14/15. Expecting lower earnings in MY15/16, cotton acreage is forecast to fall by 15 percent, and Chinese cotton production is forecast to fall further to 5.8 million tons. After three marketing years of Government cotton purchases, China will hold an estimated 59 percent of the world’s cotton stocks, a record 13.9 million tons, by the end of MY14/15. China is now seeking to manage its cotton reserves by selling state stocks and limiting the issuance of additional import quotas. These government actions coupled with a forecast weak consumption recovery are expected to slash China’s cotton imports by half and return these to MY10/11 levels prior to the implementation of China’s government cotton purchase policy. Post estimates China’s cotton imports will plunge nearly 50 percent to 1.55 million tons in MY14/15, and 1.4 million tons in MY15/16. Correspondingly, China’s imports of U.S. cotton are also expected to fall.
