By admin       2018-07-25

“We’re expecting a pretty good global yield, but on fewer acres that will mean less production. So, we’re looking at almost a 7 million bale shortfall this year in matching consumption with production. If you’re producing less of something that you need, that tends to support prices, and more than anything that’s why we’re seeing cotton prices today in the 80s rather than the 60s and 70s. We’ve never had this much demand before, so we’ll have to grow more cotton to meet it.”Looking at the change in world production this year versus last year, Reichle says, the U.S., China, and Australia are leading production downward. “We’ve planted more acres in the U.S., but we’ll harvest fewer acres. Last year, we had the highest U.S. average yield we’ve ever had, simply because of Texas. But we’re not going to replicate that this year.”China had really good yields two years in a row, he says, “but this year, they were off to a rough start in one of their major growing regions. They’ve got a good crop right now, but it’s just not going to perform like it did in the previous two seasons. In Australia, they have to catch rainwater to irrigate and they’re not getting any rain, so next year they’ll have a lot fewer irrigated acres because they won’t have the water.”On the consumption side, Reichle says, “We’re seeing really strong growth globally — and Bangladesh, China, India, and Vietnam account for 83 percent of that growth. I just got back from Bangladesh, and they are continuing to add machinery in their mills. There is “a really big increase” in overall cotton demand globally, and if projections for the new marketing year hold, it will be the most cotton that has ever been consumed worldwide, says Hank Reichle, executive vice president of the Staplcotn cooperative at Greenwood, Miss.“We’re finally climbing above the demand levels we had before the recession and $2 cotton,” he said at the joint annual meeting of the Mississippi Boll Weevil Management Corporation and the Mississippi Farm Bureau Federation Cotton Policy Committee. “Certainly, a highlight of this year is the fast rebound we’re seeing in cotton consumption.”Reichle, who had extensive experience in exports and marketing with Staplcotn before assuming his present role, says, “We’ve got good numbers this year in terms of supporting cotton price. Ending stocks are set to go down from 85 million at the beginning of the current marketing year to 77.8 million a year from now, July 31, 2019. This is happening because consumption is on the rise.Looking back over the last 19 years, the 5.5 percent year-over-year growth in consumption we saw in 2017 is really outstanding. We’re projected to grow at 3.9 percent in the current year, which is also outstanding when compared to the average in the five preceding years of just 1.5 percent.”World production in 2017 was good, he says, “but the good news is that there was really good demand for it. And this year, even though there will be more acres planted worldwide, the current expectation is that there will be 1.5 million fewer acres harvested. A lot of that has to do with the expected reduction in west Texas due to the severe drought situation there.

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