The World and U.S. Cotton Outlook for 2016/17ageconsearch.umn.edu/record/236812/files/meyer.pdf ·...
30
The World and U.S. Cotton Outlook for 2016/17 Interagency Commodity Estimates Committee Presented by Leslie A. Meyer [email protected] Agricultural Outlook Forum February 26, 2016
Transcript of The World and U.S. Cotton Outlook for 2016/17ageconsearch.umn.edu/record/236812/files/meyer.pdf ·...
The World and U.S. CottonOutlook for 2016/17
Interagency Commodity Estimates Committee
Presented byLeslie A. Meyer
Agricultural Outlook ForumFebruary 26, 2016
2
World Cotton Consumption Exceeds Production for the First Time in 6 Years…
0
20
40
60
80
100
120
140
160
180
50
60
70
80
90
100
110
120
130
140
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16est.
Cents/lb.
Million bales
Production Consumption A Index
…but prices decline further.
Sources: USDA, Interagency Commodity Estimates Committee and Cotlook.
3
Global Cotton Stocks Decline From Record…
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015
Million bales
Marketing year
China Foreign ‐ China U.S.
Source: USDA, Interagency Commodity Estimates Committee.
…but supplies represent nearly a year’s worth of consumption.
4
2015/16World Cotton Situation
5
Global Production Experienced Declines in 2015/16
‐7
‐6
‐5
‐4
‐3
‐2
‐1
0
1
China U.S. Pakistan India Turkey Brazil FrancZone
Australia
Million bale change
India becomes world’s leading cotton producer.
China’s lower area/crop mainly due to reduced support.
Weather played key role in crop shortfall
Source: USDA, Interagency Commodity Estimates Committee.
6
World Consumption DecreaseExpected in 2015/16
• Equal to the 5‐year average despite lowest prices in 7 years.– Declines expected in China and Pakistan.– Increases expected in Bangladesh and Vietnam.– India, Turkey, and the United States are unchanged.
• Macroeconomic uncertainties constraining retail growth.
• Polyester prices have fallen further than cotton, increasing its price competitiveness.
Cotton consumption estimated at 109.6 million bales.
7
China’s Cotton Mill Use Declines…
0
10
20
30
40
50
60
2009 2010 2011 2012 2013 2014 2015 proj.
Marketing year
Mill Use Yarn ImportsMillion bales/bale‐equivalents
…but yarn imports supplanted the decrease.
Sources: USDA and Global Trade Atlas.
8
China’s Cotton Yarn Import Expansion:Leading suppliers include India, Pakistan, and Vietnam
0
2
4
6
8
10
12
2009 2010 2011 2012 2013 2014 2015 proj.
Vietnam India Pakistan Others
Million bale‐equivalents
Marketing year
Sources: USDA and Global Trade Atlas.
9
Cotton Loses Share to Manmade Fibers(U.S. product imports, raw fiber‐equivalent basis)
25
30
35
40
45
50
55
60
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 Aug‐Dec2014/15
Aug‐Dec2015/16
Cotton
’s pe
rcent share Data show share still declining.
Sources: USDA, Economic Research Service and U.S. Census Bureau.
10
2015/16U.S. Cotton Situation
11
U.S. Production Declines in Each Region: Total planted area smallest since 1983
0
1
2
3
4
5
6
7
Southeast Delta Southwest West
2012/13 2013/14 2014/15 2015/16
Million bales
Source: USDA, National Agricultural Statistics Service.
12
U.S. Cotton Supply & Demand Estimates: Production and Exports Significantly Lower; Stocks Down Slightly
Unit 2014/15 2015/16 Change (%)
Beg. stocks Mil. bales 2.4 3.7 54.2Production " 16.3 12.9 ‐20.9Imports " 0.0 0.0 0.0Total supply " 18.7 16.7 ‐10.7Mill use " 3.6 3.6 0.0Exports " 11.2 9.5 ‐15.2Total demand " 14.8 13.1 ‐11.5Ending stocks " 3.7 3.6 ‐2.7Stocks‐to‐use % 25.0 27.5 10.0Farm price Cents/lb. 61.3 59.5 ‐2.9
Source: USDA, Interagency Commodity Estimates Committee.
13
U.S. Cotton Export Share by Country
Vietnam8%
Turkey14%
Mexico8%
China36%
Rest of World34%
2010/11‐2014/15 Average
Vietnam18%
Turkey15%
Mexico15%
China7%
Rest of World45%
Aug‐Jan 2015/16
Source: USDA, Foreign Agricultural Service.
14
2016/17World Cotton Outlook
15
Cotton’s Global Supply Problem:
0
20
40
60
80
100
120
2009 2010 2011 2012 2013 2014 2015 est. 2016
Marketing year
China Rest of WorldMillion bales
?
China accounts for over 60% of world stocks
Source: USDA, Interagency Commodity Estimates Committee.
16
Cotton’s Global Demand Problem:Cotton share in fiber products declining
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
Cotton/polyester price ratio
Cotton becomes less competitive as ratio moves higher.
Sources: cncotton.com (polyester) and Cotlook (cotton, A Index).
17
Key Assumptions for USDA’s 2016/17 Forecast
• World economic growth improves in calendar 2016 & 2017, aiding cotton consumption prospects.
• China continues policies discouraging production and limiting imports to reduce surplus stocks, with reserve sales higher.
• Normal weather and growing conditions provide modest rebound in global production.
• World and U.S. cotton prices decline slightly.
18
Global Production Projected Higher in 2016/17
‐1.5
‐1
‐0.5
0
0.5
1
1.5
2
Pakistan U.S. India Australia Turkey FrancZone
Brazil ChinaMillion bale change
Pakistan, the U.S., and India lead recovery; China continues lower.
Yield rebound largely behind production growth
Source: USDA, Interagency Commodity Estimates Committee.
19
World Cotton Consumption GrowthLimited in 2016/17
• Global consumption projected at 110.5 M bales.– Modest growth (< 1%) based on global GDP increase.– Polyester price competition remains strong.
• China consumption to grow 1 M bales.– Increased access to reserve stocks.– Expansion of Xinjiang spinning.
• Consumption outside China: No‐net growth projected.– Vietnam and Bangladesh continue expansion.– India and U.S. remain flat while others decline.
• Cotton’s share of world fiber market continues to decline.
20
World Cotton Supply & Demand Projections:Consumption Exceeds Production; Stocks Reduced Further
Unit 2015/16 2016/17 Change (%)
Beg. stocks Mil. bales 112.2 104.1 ‐7.2
Production " 101.4 105.5 4.1
Imports " 35.0 35.0 0.0
Total supply " 248.5 244.6 ‐1.5
Consumption " 109.6 110.5 0.8
Exports " 35.0 35.0 0.0
Total demand " 144.6 145.5 0.6
Ending stocks " 104.1 99.1 ‐4.8
Stocks‐to‐consumption % 95.0 89.7 ‐5.6
Source: USDA, Interagency Commodity Estimates Committee.
21
Global Cotton Stocks Projected Lower…
0
20
40
60
80
100
120
0
20
40
60
80
100
120
2011 2012 2013 2014 2015 est. 2016 proj.
Marketing year
China Rest of World A IndexMillion bales
?
Cents/lb.
…but world prices also decline.
Source: USDA, Interagency Commodity Estimates Committee.
22
2016/17U.S. Cotton Outlook
23
February 17, 2015
February 16, 2016
Drought Monitor Shows Improvement in 2016…
… but dry conditions developing in Texas.
24
Outlook for 2016 U.S. Cotton Area
• Planted acreage expected higher due mainly to 2015 “prevented plantings” area returning. – Total plantings at 9.4 M acres—nearly 10% higher.– NCC survey indicated 9.1 M acres.
• Relative prices favor cotton slightly, but high input costs may offset this advantage.
• Cotton marketing loan program cushions the downside price risk.
25
U.S. Cotton Planted Area:A Historical Perspective
0
3
6
9
12
15
18
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Million acres
Marketing year
Source: USDA, National Agricultural Statistics Service.
Despite 2016 rebound projection, area remains near historical lows.
26
U.S. Cotton Area, Yield, and Production
Southwest expected to account for 60% of planted area
Unit 2015/16 2016/17 Change(%)
Planted area Mil. acres 8.58 9.40 9.6
Harvested area " 8.08 8.45 4.6
Abandonment rate % 5.9 10.1 71.2
Yield/harvested acre Lbs. 769 812 5.6
Production Mil. bales 12.94 14.30 10.5
Key Factors Include Crop Conditions & Abandonment
Source: USDA, Interagency Commodity Estimates Committee.
27
U.S. Cotton Supply & Demand Projections: Production and Exports Rebound; Stocks Unchanged
Unit 2015/16 2016/17 Change (%)
Beg. stocks Mil. bales 3.7 3.6 ‐2.7Production " 12.9 14.3 10.5Imports " 0.0 0.0 0.0Total supply " 16.7 17.9 7.6Mill use " 3.6 3.6 0.0Exports " 9.5 10.7 12.6Total demand " 13.1 14.3 9.2Ending stocks " 3.6 3.6 0.0Stocks‐to‐use % 27.5 25.2 ‐8.4Farm price Cents/lb. 59.5 58.0 ‐2.5
Source: USDA, Interagency Commodity Estimates Committee.
28
U.S. Export Forecast Higher in 2016/17:Growth Contingent Upon Several Factors
• Relatively tight foreign stocks outside China.– Beginning stocks lowest in 6 years.– Import demand similar to 2015/16.
• Increased exportable supplies in the United States.– Additional 1+ M bales at current production expectations.– U.S. share of world trade (30.6%) between previous 2 seasons.
• Better quality distribution of the 2016 U.S. crop expected.– High quality cotton limited in 2015.– Less than 60 percent of U.S. crop tenderable.
29
Variables that Could Change the Outlook
• Greater world area response to low prices than anticipated.
• Weather and growing conditions altering production.
• Further China policy changes affecting stocks and prices.
• Macroeconomic growth varying from average expectations.
• Changes in polyester prices relative to cotton.
30
Final Thought:
“Prediction is very difficult, especially if it’s about the future.”
‐‐Niels Bohr, Nobel laureate in Physics
Thank You
![AtRAV1 and AtRAV2 overexpression in cotton increases fiber ......of flowering time via direct repression of the “florigen” componentFLOWERING LOCUS T (FT; AT1G65480) [24]a small](https://static.fdocuments.us/doc/165x107/60847f4a457a35387615d7df/atrav1-and-atrav2-overexpression-in-cotton-increases-fiber-of-flowering.jpg)
