World cotton consumption dropped 3% in 2015-16: ICAC

Global consumption of cotton declined by 3 per cent to 23.6 million tons in 2015-16, and it is likely to remain at the same level in 2016-17 due primarily to low polyester prices and weak global economic growth, the International Cotton Advisory Committee (ICAC) has said in its latest report.

In 2015-16, China remained the world’s largest consumer and its cotton mill use is estimated at 7.1 million tons. However, its cotton consumption is expected to decrease by 5 per cent to 6.7 million tons in 2016-17 mainly due to high domestic cotton prices, particularly compared with those of polyester, ICAC said.

After falling by 3 per cent in 2015-16 to 5.2 million tons, cotton consumption in India is expected to rise by 4 per cent to 5.4 million tons in 2016-17 due to favourable textile export policies, well integrated downstream industries and competitive prices.

In Pakistan, mill use fell by 12 per cent to 2.2 million tons in 2015-16 due to the ongoing energy crisis, high costs of production, and weak cotton yarn demand. Mill use is forecast to rise by 1 per cent, to a little over 2.2 million tons in 2016-17.

Bangladesh and Vietnam are projected to see significant growth in 2016-17, with mill use increasing by 16 per cent to 1.3 million tons in Vietnam and 10 per cent to 1.2 million tons in Bangladesh.

In 2016-17, world cotton imports are forecast to increase by 1 per cent to 7.4 million tons. Imports by China are projected to fall by 12 per cent to 960,000 tons in 2016-17 due to the government’s desire to reduce its cotton reserve stock and restrict imports. However, imports by the rest of the world are expected to increase by 3 per cent to 6.5 million tons, with Vietnam and Bangladesh emerging as the world’s largest importers, accounting for 34 per cent of the world’s imports.

World cotton production dropped by 17 per cent to 21.8 million tons in 2015-16 as world cotton area shrank and many countries experienced below-average yield. However, production is forecast to increase by 6 per cent to 23 million tons as world cotton area expands and yields improve. India is likely to maintain its place as the world’s largest producer in 2016-17 and its production is projected to increase by 10 per cent to 6.5 million tons. Production in China is expected to fall by 10 per cent to 4.6 million tons due to reduced subsidies and high production costs.

World ending stocks are expected to decrease by 4 per cent to 19.7 million tons by the end of 2016-17, which would follow an 8 per cent reduction in stocks to 20.4 million tons in 2015-16. However, ending stocks outside of China are projected to rise by 3 per cent to 8.8 million tons in 2016-17.