Cotton. World Markets and Trade. Sep 2013 Sept. 13, 2013
Surging Competitor Exports Alter U.S. Shipping Pattern
The three years from 2010 through 2012 have seen record production in Brazil and Australia, resulting in sharply higher southern hemisphere exportable supplies. Consequently, those countries have seized a larger share of the global market. The intensified competition has significantly influenced buyers’ purchasing patterns and the monthly shipping pattern of the United States. As a result, in the first three months of the marketing year, U.S. exports have fallen as Brazil’s new crop becomes available. After Brazil and Australia’s exportable supplies dwindle, U.S. exports rebound only to fall off in the last quarter of the year as new Australian crop becomes available. Thus, the window of demand for U.S. cotton has shifted and narrowed to the December/April period as greater supplies are available from these competitors.
For 2013/14 the global outlook has production and ending stocks up slightly, primarily in India. The forecast for the average price received by U.S. farmers is lowered to 77 cents per pound.
The U.S. spot price and the A-Index are down slightly on concerns about China’s reserve policy.
2013/14 TRADE OUTLOOK
• United States is cut 200,000 bales to 10.4 million on increased foreign competition.
• India is up 750,000 bales to 7.0 million on larger exportable supplies.
• Australia is down 100,000 bales to 4.2 million on tighter exportable supplies.
• India is increased 300,000 bales to 1.5 million on strong early season demand.
• Turkey is raised 150,000 bales to 4.1 million on expected higher consumption.
• Indonesia is up 150,000 bales to 2.7 million on expected higher consumption.
Trade Changes 2012/13
• Australia is raised 179,000 bales to 6.2 million on strong late season shipments.
• Malaysia is lowered 125,000 bales to 725,000 on slower transshipments.
• Syria is up 100,000 bales to 150,000 as domestic use is disrupted.
• India is down 200,000 bales to 1.3 million on slower late season shipments.
• Malaysia is lowered 150,000 bales to 850,000 on slower transshipments.
• Indonesia is raised 100,000 bales to 2.6 million on greater domestic use