US cotton production projected to reach 16.5 mn bales in June 2023

The upland production estimate stands at 16.1 million bales, rising from last season's 14 million bales. The extra-long staple (ELS) crop projection is estimated at 400,000 bales, down from the previous year's 470,000 bales, as per USDA’s Cotton and Wool Outlook: June 2023 report.

Despite an overall increase in production, expectations for the cotton-growing area for 2023-24 have been lowered due to reduced cotton prices and increased prices of competing crops. The USDA's March survey of farmers' planting intentions revealed an 18 per cent reduction in the cotton area from last season, although it remains slightly above the 2021-22 level.

As of June 11, 81 per cent of the forecast cotton acreage was planted, a decrease from last season's 89 per cent and the 2018-2022 average of 86 per cent. Early cotton development has also been slightly below both 2022 and the five-year average.

The USDA anticipates that 9.4 million acres of US cotton will be harvested in 2023-24, reflecting a 10-year weighted average abandonment by region. The abandonment projection stands at 16 per cent, a significant reduction from the 47 per cent in 2022-23. The cotton yield for 2023-24 is forecast at 841 pounds per harvested acre, which falls below the record 950-pound yield of the previous year due to significant losses of lower-yielding Southwest area owing to a severe drought.

Projected cotton demand, combining exports and mill use, for 2023-24 stands at 16.2 million bales, a 500,000 bales increase from the May forecast. Although cotton exports are expected to rise by nearly 8 per cent, competition from other cotton-producing nations will continue to limit growth.

The US is set to remain the world's leading cotton exporter, but other countries like Brazil are anticipated to present increased competition with larger supplies in the global market. As a result, the US share of global trade is forecast to dip slightly to 32 per cent.

US cotton mill use is expected to rise by 10 per cent (200,000 bales) to 2.2 million bales in 2023-24, despite still being one of the lowest levels on record. Lower cotton prices and decreasing global yarn inventories are expected to boost US cotton mill use as the country continues to be a major exporter of yarn and fabric for apparel production.

Finally, the USDA's June supply and demand estimates indicate that 2023-24 US cotton ending stocks are projected at 3.5 million bales, 300,000 bales (9 per cent) above the beginning level. The stocks-to-use ratio is projected at a relatively low 22 per cent, similar to the last two years. The 2023-24 US upland farm price is forecast to decrease from an estimated 82 cents per pound for 2022-23 to 77 cents per pound.

Fibre2Fashion News Desk (DP)