Global cotton production in 2017/18 is forecast at 122.2 million bales, 14% above last season and the largest production in five years, according to the latest report by US Department of Agriculture (USDA). According to the latest report, world harvested area in 2017/18 is estimated at 33.3 million hectares, 12% above 2016/17—as returns from cotton were more favourable and encouraged cotton plantings over alternative crops. The global yield is forecast to rise to 799 kg per hectare in 2017/18, the highest in four years and the second highest on record.
All major cotton producers are projected to harvest a larger crop in 2017/18, with increases for China and the US leading the gain. In 2017/18, the top three producing countries – India, China, and the US – are projected to account for 63% of the global cotton crop, similar to the previous season. India’s production is forecast at 28.5 million bales, about 6% above last season. For Brazil, cotton production is expected to reach 8.7 million bales in 2017/18, compared with 7 million last season.
World cotton consumption in 2017/18 is projected at 120.4 million bales, 5% above 2016/17. Although cotton mill use has been rising relatively steadily for the past six seasons, an expanding global economy and the slowdown in polyester production contributed to this year’s above-average growth. Despite the highest cotton consumption in a decade, 2017/18 world production is expected to exceed consumption for the first time in three years. China, the leading spinner of raw cotton, is projected to use 40 million bales of cotton in 2017/18. China accounts for one-third of the global cotton mill use total. In addition, cotton yarn imports by China could include an additional 8 million bale-equivalents of raw fibre to support its growing textiles and apparel industry. Small consumption gains in 2017/18 are seen for both India and Pakistan, where mill use is projected at 24.2 million bales and 10.4 million bales, respectively. Larger increases, however, are expected in Vietnam, Bangladesh, and Turkey.
World cotton trade
World cotton trade is projected at 39.1 million bales in 2017/18, 4% above the previous season and the largest in four years. Higher trade is primarily driven by increased import demand from countries that process raw cotton into textile and apparel products. In 2017/18, Bangladesh, Vietnam, and China are forecast as the leading cotton importers, although all major importing countries are expected to show increases this season. With cotton exports by the US slightly above a year ago, 2017/18 gains are primarily noted by higher shipments from Brazil and Australia – a result of their larger high-quality supplies – as reductions are forecast for the other major exporters.
In March, the USDA announced the Cotton Ginning Cost-Share (CGCS) programme, which provides cost-share payments to cotton producers to offset their 2016 ginning costs and assist with the marketing of cotton. The CGCS programme only applies to producers who have reported 2016 cotton acres to USDA/FSA. Through the CGCS programme, eligible producers can receive a one-time cost-share payment based on the producer’s share of reported 2016 cotton acres and the regional payment rate announced by USDA. The payment rate was determined to equal 20% of the average ginning cost for each production region. These payment rates ranged from US$ 19.65 per acre to US$ 48.02 per acre, depending on the region.