Cotton: World Markets and Trade. Aug 2014 Aug. 19, 2014
China’s Share of U.S. Exports Lowest in a Decade
U.S. Export Sales data shows that the share of U.S. 2013/14 exports shipped to China dropped below 25 percent for the first time since 2004/05. Exports to China fell by over 50 percent from the previous season to 2.5 million bales, accounting for nearly all of the 20-percent decline for U.S. exports.
In 2013/14, China’s total imports are estimated down nearly one-third from the previous year, due in part to the tightening of import access by the government in response to mounting government stocks. At the same time U.S. production fell 25 percent due to the effects of the severe drought, limiting exportable supply.
With sharply lower U.S. exports to China, preliminary official Chinese imports data shows that both India and Australia are both poised to capture their largest shares of that market in nearly two decades. Depending on the final data, China’s imports from Australia may surpass those from the United States, which would push the U.S. market share into third place for the first time in over 20 years.
Partially offsetting the weak U.S. performance in the Chinese market were robust shipments to other major markets. U.S. shipments to its next six largest markets (Turkey, Mexico, Vietnam, Indonesia, Thailand and Korea) were all up. In the aggregate, shipments to these markets were up by nearly 20 percent and totaled 56 percent of all U.S. exports.
Despite a much larger U.S. exportable supply in 2014/15, China’s imports are forecast to fall another 40 percent. With continued strong competition from India and Australia, it remains to be seen if the United States will regain the dominant share of China’s imports.
For 2014/15, world ending stocks are forecast slightly lower due to smaller carry-in, while higher production is offset by greater use. Total trade is larger. U.S. production is up sharply resulting in
higher exports and ending stocks. The midpoint for forecast for the season average U.S. farm price range is lowered 3 cents to 65 cents/pound.
The U.S. spot price and the A-Index have weakened sharply over growing concerns that China’s policy will lower new crop prices.
2014/15 TRADE OUTLOOK
• United States is raise 500,000 bales to 10.7 million on a larger crop.
• Australia is lowered 300,000 bales to 3.0 million on a smaller carry-in.
• Brazil is raised 300,000 bales to 3.7 million on larger foreign demand.
• India is increased 300,000 bales to 5.8 million on larger exportable supplies.
• Vietnam is up 400,000 bales to 9.9 million on greater demand.
• Bangladesh is up 100,000 bales to 4.45 million on stronger demand.
• Turkey is up 100,000 bales to 4.0 million on smaller carry-in