US Department Of Agriculture: The Global Cotton Inventory At The Beginning Of The Period Decreased And The Trade Remained Unchanged

The estimation of demand and supply of American cotton in 2023/24 shows that the output, export volume and ending inventory have decreased compared with the previous month. The output decreased by 315000 bales to 12.8 million bales, down 2% month on month, because the decline in Texas output offset the increase in other regions. Due to the expected decline in output, the export volume decreased by 100000 bales to 12.2 million bales, and the ending inventory decreased by 200000 bales. It is estimated that the average seasonal price of upland cotton in 2023/24 will be the same as last month, 80.0 cents per pound, nearly 5 cents lower than the final price of 84.8 cents in 2022/23.

The global cotton inventory at the beginning of 2023/24 this month decreased by 10.3 million bales to 82.8 million bales compared with September, which is fully attributable to the permanent accounting changes in Brazil's balance sheet since 2000/01. Due to this change, the ending inventory of the global balance sheet in 2023/24 will also decrease by 10 million packages. In order to better explain the change of harvest time in Brazil, the US Department of Agriculture has advanced its yield forecast for 2000/01-2022/23 by one year. Prior to this change, the US Department of Agriculture estimated that Brazil's and global ending inventories were significantly overstated, as they reflected Brazil's annual production.

In another yield change, the USDA estimates that the Brazilian crop will increase by 160000 bales to 14.56 million bales in 2023/24, reflecting the revision made by CONAB on October 10.

Other changes in the global balance sheet in 2023/24 are very small. The output was 210000 bales higher than that in September, because the production increase in Brazil, Argentina and Tanzania offset the production reduction in the United States, Australia and Greece. Global consumption and trade have barely changed, decreasing by 89000 packets and 35000 packets respectively.