China’s Mill Use Continues to Grow

World cotton exports are estimated at 38.9 million bales, up 4.5 % from the previous year. The bulk of the surge in world cotton exports comes from the US, Brazil, & India. The United States, the world’s leading cotton exporter, will account for 37 % of cotton exports in 2007/08. India & Brazil will account for 16 % and 6 %, respectively. Brazil is estimated to import 250,000 bales in 2007/08, down more than 50 % from the previous year. At the same time, Brazil’s exports are estimated to grow 77 % to an all time high of 2.3 million bales. This surge in exports is partly due to increasing supplies from Brazil’s Mato Grosso state where about 52 % of the country’s cotton is produced. In addition, there has been increasing demand for Brazil’s cotton from China, Pakistan, South Korea, & Europe.

World cotton imports for 2007/08 are estimated at 39 million bales, up 4.8 % from the previous year. China has the unique characteristic of being both the world’s leading cotton producer % consumer. Given the huge gap between domestic cotton production and consumption, China leads the world in cotton imports. In 2007/08, China alone is expected to account for 31 % of world cotton imports, representing 23 % of China’s estimated cotton consumption for that year. Strong growth in textile exports and a growing domestic economy are driving the increasing cotton consumption in China. Mill use in China is estimated at 53 million bales, up 3 million from 2006/07. At the estimated level, China would more than double its use of cotton from a decade ago. The average mill use is calculated from 2003/04 to 2007/08. For both the average and current year estimates, China stands out as the largest user of cotton. Following a distant second is India, where mill use is forecast to remain flat at 18.1 million bales in 2007/08. In the United States, mill use has been declining since 2004/05.

In 2007/08, the United States is estimated to use 4.7 million bales of cotton, down 5 percent from 2006/07. The share of mill use in the 2007/08 U.S. production estimate is 24 percent as compared with the share of exports which is estimated at 75 percent.

Source: United States Department of Agriculture