Global cotton stockpiles will be lower than forecast a month ago as demand increased in China, India and Bangladesh, the U.S. Department of Agriculture said.
World inventories will total 81.74 million bales in the year ending July 31, down from the February estimate of 81.86 million, the USDA said today in a report. Seven analysts surveyed by Bloomberg expected 81.61 million, on average. Global use was projected at 107.11 million bales, up from 106.24 million last month. Output will be 119.87 million bales, up from 118.95 million forecast in February.
The agency increased its estimate for the crop in China, the world’s biggest consumer and importer of the fiber, to 35 million bales, up 2.9 percent from 34 million last month. The nation’s projected consumption was raised to 36 million bales from 35.5 million last month, the department said.
China is importing more yarn, “with India, Pakistan, Bangladesh and Vietnam the key recipients of this demand,” Sharon Johnson, a senior market specialist at Knight Futures in Roswell, Georgia, said in an e-mail before the USDA report.
Exports from the U.S., the top shipper, will be 12.75 million bales, up from 12.5 million projected in February, and 11.71 million shipped a year earlier, the agency said. U.S. output in the harvest that started in August and ended late last year was estimated at 17.01 million bales, unchanged from a month earlier.
Domestic inventories on July 31 will be 4.2 million bales, down from 4.5 million estimated last month, the agency said. Stockpiles were 3.35 million a year earlier, according to the USDA said. A bale weighs 480 pounds (218 kilograms).
Strong demand for American cotton “has proven to be a bit of a pleasant surprise for bulls and irritation for bears,” Johnson said.
Cotton for May delivery rose 2.1 percent to 88.32 cents a pound at 9:04 a.m. on ICE Futures U.S. in New York. The fiber has climbed 18 percent this year as global demand rebounded from a slump in 2012 and production dropped.
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