Industrial Cluster: Data Status Of Global Cotton Output In The Next Two Years

According to the monthly report data of USDA's global cotton supply and demand forecast in May, the US cotton output in 2024/25 is estimated to be 3.48 million tons, with a year-on-year increase of 850000 tons, up 32.47%. For the global estimate, with the increase of global planting area and output, the output in 2024/25 is expected to increase by 5% to the highest level in five years.

The export progress of the United States and Brazil is relatively slow. According to the USDA's export target of 2.68 million tons of American cotton in 2023/24, the current progress of American cotton export contracting has reached 104.36%, a year-on-year decrease of 2.31 percentage points, also lower than the average level of 107.54% in the past five years. According to the USDA's export target of 2.63 million tons of Brazilian cotton in 2023/24, Brazil's export progress has reached 81.62%, 5.06 percentage points behind the previous year, and 87.31% below the average level in the past five years.

At present, China's cotton is in the period of seeding and emergence. According to the survey data of Xinjiang organized by the National Cotton Market Monitoring System, the cotton planting area in Xinjiang production areas is flat or slightly reduced compared with the previous year. The planting area in some areas has declined by 3% - 5%, and the planting area in some areas is flat. On the other hand, according to the cotton processing enterprises in Xinjiang's production areas, the cotton is growing well on the whole, better than the same period last year, and the per unit yield is generally expected to increase in all regions, ranging from 5% to 15%. It is preliminarily estimated that China's production in 2024/25 is expected to be flat or slightly reduced, and the production reduction is expected to be weaker than before.

The planting data of American cotton last week was relatively negative, and the progress of export contract signing was still slow, which made the price of American cotton fall last week, covering the increase of the previous week. Domestically, the import volume of the supply side has increased significantly year on year, and the sliding allowance tax quota may be issued in the second half of the year, and the import volume may continue to increase. On the other hand, domestic new cotton planting is in good condition. The demand side is currently in the off-season, and the spinning profit continues to be poor, the downstream demand is weak, and the speed of destocking is slowing. From the perspective of supply and demand, cotton prices are still negative, but the trend may be repeated due to the impact of the strong domestic commodity cycle. It is suggested to add short every rebound strategically.

The sowing of American cotton is progressing smoothly, and the high yield is expected to be strengthened

At present, cotton in the United States is in the seeding and emergence period, with sporadic rainfall in various regions of the United States, and the overall moisture content is good. According to the statistics of the United States Department of Agriculture (USDA), as of May 31, the proportion of drought free cotton producing areas in the United States was 66%, 10 percentage points ahead of the same period last year, and 8 percentage points ahead of the average in recent five years. The seeding of new cotton continued to advance under good weather and soil conditions, and the overall seeding progress was at a leading level in recent years. According to the statistics of the United States Department of Agriculture (USDA), as of May 26, the progress of cotton planting in the United States was 59%, 3 percentage points ahead of the same period last year, and 2 percentage points ahead of the average in recent five years. Among them, the sowing progress of Texas, the main cotton producing area, is 50%, 4 percentage points ahead of the same period last year, and 1 percentage point ahead of the average progress in recent five years. On the other hand, as of May 26, the excellent rate of American cotton was 60%, 12 percentage points ahead of the same period last year, and 12 percentage points ahead of the average in the past five years. The last time such a high excellent rate was achieved was in 2021 and 2017. According to this excellent rate, American cotton will be prolific in 2024/25, and the data is relatively negative.

According to the planting intention report data released by the United States Department of Agriculture (USDA) in March this year, the intended planting area of cotton in the United States in 2024/25 was 10.673 million acres, up 4.3% year on year. On the other hand, according to the monthly report data of the USDA's global cotton supply and demand forecast in May, the abandonment rate of American cotton in 2024/25 was initially estimated to be 14.43%, 16.55 percentage points lower than the previous year. Due to a slight increase in planting area and less than half of the abandoned farmland rate in 2023/24, it is estimated that the cotton output of the United States in 2024/25 is estimated to be 3.48 million tons, an increase of 850000 tons year-on-year, up 32.47%. For the global estimate, with the increase of global planting area and output, the output is expected to increase by 5% in 2024/25. Brazil, the United States and Turkey increased production more than China and India reduced production. It is expected that the increase in global supply will push up the use and trade volume to the highest level in five years.

The export progress of the United States and Brazil is slow

At present, the progress of American cotton export signing is slow. According to the latest data from the United States Department of Agriculture (USDA), as of May 16, the cumulative contracted export volume of American cotton in 2023/24 was 2.795 million tons, a decrease of 169000 tons compared with the same period last year, and a decrease of 559000 tons compared with the average in the past five years. Among them, the cumulative shipment volume was 2048000 tons, 87000 tons less than the same period last year, 334000 tons less than the average in the past five years. According to USDA's export target of 2.68 million tons of American cotton in 2023/24, the current progress of American cotton export contracting has reached 104.36%, a year-on-year decrease of 2.31 percentage points, which is also lower than the average level of 107.54% in the past five years. The cumulative export contracted volume of American cotton in the next year (2024/25) is 375000 tons, an increase of 9000 tons over the same period last year, and a decrease of 127000 tons over the average of the past five years; According to USDA's export target of 2.83 million tons in 2024/25, the export contracting progress of American Cotton next year has reached 13.25%, a year-on-year decrease of 0.41 percentage points, slightly lower than the average level of 16.77% in recent five years.

In Brazil, according to the Brazilian customs data, as of the end of April, Brazil's exports in 2023/24 totaled 2.15 million tons, an increase of 890000 tons over the same period last year, and 390000 tons over the average of the past five years. Although Brazil's export volume increased significantly year on year, Brazilian cotton increased by 620000 tons to 3.17 million tons year on year in 2023/24, an increase of 124%. According to the USDA's export target of 2.63 million tons of Brazilian cotton in 2023/24, Brazil's export progress has reached 81.62%, 5.06 percentage points behind the previous year, and is also lower than the average level of 87.31% in the past five years.

　 Weakening production reduction expectation in Xinjiang

2023/24 China's cotton picking production is completed. According to the data of China Cotton Association, China's cotton output in 2023/24 will be 5.87 million tons, with a year-on-year reduction of 750000 tons. At present, China's cotton is in the period of seeding and emergence. According to the survey data of Xinjiang organized by the National Cotton Market Monitoring System, the cotton planting area in Xinjiang production areas is flat or slightly reduced compared with the previous year. The planting area in some areas has declined by 3% - 5%, and the planting area in some areas is flat. On the other hand, according to the cotton processing enterprises in Xinjiang's production areas, the cotton is growing well on the whole, better than the same period last year, and the per unit yield is generally expected to increase in all regions, ranging from 5% to 15%. It is preliminarily estimated that China's output will be flat or slightly reduced in 2024/25, and the production reduction is expected to be weaker than before. According to the data in the May global cotton supply and demand forecast monthly report of the United States Department of Agriculture (USDA), China's output in 2024/25 is estimated to be 5.88 million tons, with a year-on-year decrease of 110000 tons, or 2%. According to the latest estimate of China Cotton Information Network, China's output in 2024/25 will be 5.83 million tons, with a year-on-year decrease of 180000 tons, or 3%.

　 Domestic consumption is weak, and sales progress is slow year-on-year

This year's consumption in the domestic terminal market was OK, but the export market fell back. The retail sales of clothing, shoes, hats, needles and textiles in March and April in China were close to that of last year. According to the data from the National Bureau of Statistics, the retail sales of clothing, shoes, hats, needles and textiles in March and April this year were 223 billion yuan, slightly higher than the 221.6 billion yuan in the same period last year. In terms of exports, the export volume of clothing and accessories from January to April declined compared with the same period last year. According to the data from the National Bureau of Statistics, the export volume of clothing accessories from January to April this year was 45.5 billion US dollars, a year-on-year decrease of 2.5 billion US dollars, or 5.23%.

Since this year, the spinning profit has continued to be poor. The traditional peak season of "gold, three silver and four silver" is not prosperous, and downstream consumption is weak. Compared with the same period last year, the operating rate of the downstream industry chain has declined significantly. According to MYSTEEL data, as of May 24, the operating rate of the spinning mill was 79.%. On the other hand, the number of imported cotton in China increased significantly this year and domestic cotton competed in the market, which together led to a significant slowdown in the sales progress of domestic cotton this year. According to the statistics of the national cotton market monitoring system, as of May 24, the cumulative sales progress of cotton nationwide was 76.2%, down 13.8 percentage points year on year.