 "Cotton crop worldwide seen falling")
The global cotton harvest will probably tumble more than expected in the coming year, as farmers make more money planting grains even after the fibre's rally, the International Cotton Advisory Committee (ICAC) said.
Output may be less than ICAC's estimate on March 1, Terry Townsend, executive director, said in an interview, without providing a number. Farmers may reap 22.56 million tonnes in the 12 months starting August 1, a 14 per cent plunge from 26.26 million tonnes this year, the committee said earlier this month. Usage will be 23.8 million tonnes versus 23.3 million tonnes. Cotton slumped 18 per cent in 2012, sliding for a second year, as soybeans climbed 17 per cent and corn rose eight per cent. Farmer margins are lower for cotton than competing crops like corn and beans, Goldman Sachs Group Inc said in a report March 11. Cotton may extend gains as exportable supplies drop from the US, the largest shipper, Rabobank International said.
"The ratios of cotton to maize, cotton to rice, cotton to soybeans, all are moving against cotton in favour of those crops," Terry Townsend, executive director of ICAC, said in an interview in Singapore yesterday. "Our estimates for world cotton area are declining for 2013-2014."
Sowings decline
A tonne of cotton in New York costs about 6 times the price of rough rice in Chicago, down from an average of 7.2 times in the past three years, data compiled by Bloomberg show. The cotton-corn ratio of 6.8 is lower than the average of 9.4, while the cotton-soybean ratio is 3.7 versus 4.8.
A 18 per cent jump in futures in New York this year may slow the decline in sowings in the US, the largest shipper. Plantings will probably drop to 11 million acres, said Jordan Lea, the chairman of Eastern Trading Co, an exporter in Greenville, South Carolina. The US government predicted a decline to 10 million acres on February 22 from 12.32 million acres last year. Cotton for May delivery traded at 88.88 cents a pound in New York at 4:14 p.m. Singapore time.
In China, the largest grower and user, output may be more than 7 million tons in the year starting September, bigger than the 6.65 million tons estimated in November, as higher yields partly offset a drop in area, Xi Jin, a manager at China National Cotton Information Center, said in Singapore today. That compares with 7.6 million tons a year earlier, he said.
'Fierce' competition
"Competition between grains and cotton is fierce," Xi said. Government policy makes it more profitable for farmers to grow grains rather than cotton and the buying price may need to increase to persuade farmers to stay with the crop, he said.
The purchase policy has boosted domestic prices and spurred more imports, taking purchases of the biggest buyer to 3.8 million tons in the year through July, more than the US government estimate of 3.3 million tons, according to the median of five analyst estimates compiled by Bloomberg.
While cotton purchases fell in January for the first time in four months, imports of yarn advanced for three straight months, a run not seen since 2011, Chinese customs data compiled by Bloomberg show. Rising yarn imports will "fuel a boom" in cotton consumption by yarn producers including India, Pakistan, Brazil and the US, he said.
Output may be less than ICAC's estimate on March 1, Terry Townsend, executive director, said in an interview, without providing a number. Farmers may reap 22.56 million tonnes in the 12 months starting August 1, a 14 per cent plunge from 26.26 million tonnes this year, the committee said earlier this month. Usage will be 23.8 million tonnes versus 23.3 million tonnes. Cotton slumped 18 per cent in 2012, sliding for a second year, as soybeans climbed 17 per cent and corn rose eight per cent. Farmer margins are lower for cotton than competing crops like corn and beans, Goldman Sachs Group Inc said in a report March 11. Cotton may extend gains as exportable supplies drop from the US, the largest shipper, Rabobank International said.
"The ratios of cotton to maize, cotton to rice, cotton to soybeans, all are moving against cotton in favour of those crops," Terry Townsend, executive director of ICAC, said in an interview in Singapore yesterday. "Our estimates for world cotton area are declining for 2013-2014."
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The drop in acreage is led by the biggest growers including China, India, Pakistan and the US, said Townsend. The Northern Hemisphere, which supplies 85 per cent of the world crop, plants the fiber from now through June, he said.
Sowings decline
A tonne of cotton in New York costs about 6 times the price of rough rice in Chicago, down from an average of 7.2 times in the past three years, data compiled by Bloomberg show. The cotton-corn ratio of 6.8 is lower than the average of 9.4, while the cotton-soybean ratio is 3.7 versus 4.8.
A 18 per cent jump in futures in New York this year may slow the decline in sowings in the US, the largest shipper. Plantings will probably drop to 11 million acres, said Jordan Lea, the chairman of Eastern Trading Co, an exporter in Greenville, South Carolina. The US government predicted a decline to 10 million acres on February 22 from 12.32 million acres last year. Cotton for May delivery traded at 88.88 cents a pound in New York at 4:14 p.m. Singapore time.
In China, the largest grower and user, output may be more than 7 million tons in the year starting September, bigger than the 6.65 million tons estimated in November, as higher yields partly offset a drop in area, Xi Jin, a manager at China National Cotton Information Center, said in Singapore today. That compares with 7.6 million tons a year earlier, he said.
'Fierce' competition
"Competition between grains and cotton is fierce," Xi said. Government policy makes it more profitable for farmers to grow grains rather than cotton and the buying price may need to increase to persuade farmers to stay with the crop, he said.
The purchase policy has boosted domestic prices and spurred more imports, taking purchases of the biggest buyer to 3.8 million tons in the year through July, more than the US government estimate of 3.3 million tons, according to the median of five analyst estimates compiled by Bloomberg.
While cotton purchases fell in January for the first time in four months, imports of yarn advanced for three straight months, a run not seen since 2011, Chinese customs data compiled by Bloomberg show. Rising yarn imports will "fuel a boom" in cotton consumption by yarn producers including India, Pakistan, Brazil and the US, he said.