US cotton shipments to Vietnam through 11 months of the 2016-17 marketing year have grown by 70 per cent as import demand continues to expand. Continuing expansion of Vietnam’s mill use has supported extremely robust sales this year, according to the US department of agriculture (USDA). Vietnam is likely to remain the largest market for US cotton.
US share in total Vietnamese cotton imports is projected to reach 60 per cent this season, the Foreign Agricultural Service of the USDA said in its July 2017 report on ‘Cotton: World Markets and Trade’.
During the 11-month period, US cotton shipments have nearly tripled to China, India, Indonesia, and Pakistan. This has resulted in US cotton capturing a greater market share alongside substantial expansion of total imports in these countries. With exports to China up by nearly 200 per cent, it is now set to be the second largest US market, after having fallen to fifth place in 2015-16, its lowest ranking in 15 years.
In fact, US export shipments through 11 months of the 2016-17 marketing year are running more than 70 per cent ahead of year-ago levels. This broad based expansion has kept US cotton exports on track to reach the USDA forecast of 14.5 million bales, the second highest level on record, the report said.
The increase in US cotton exports is widely distributed across markets, with exports up in 20 of the 25 largest US markets. Among the top 10 markets, only Mexico and Turkey have not exhibited robust growth. Mexico’s mill use has been declining and the US has a pre-existing near-100% share of the import market, therefore export growth to Mexico is limited.
Export growth in Turkey has been constrained by a much larger domestic crop which has reduced overall import demand by over 25 per cent. The increase in US exports represents a large increase in the US market share of Turkey’s imports. Globally, strong US exports reflect improved market share in many markets, as the global consumption recovery has only modestly raised world import demand.
For 2016-17, USDA has kept the US cotton balance sheet unchanged from its previous estimate, while it has forecast the US season-average farm price to reduce half a cent to 68 cents-pound.
For 2017-18, the forecast shows higher global production, primarily in India. Higher beginning stocks are also forecast, but these are partially offset by higher consumption; global ending stocks are forecast higher. The US balance sheet has area and production down, resulting in lower ending stocks. The US season-average farm price forecast is 3 cents lower at 61 cents-pound. (RKS)
Fibre2Fashion News Desk – India