‘China’s dip in cotton acreage likely to be permanent’

Cotton growing area in China has reduced by nearly 50 per cent over the last eight years, and this dip is likely to become permanent as cotton acreage is unlikely to increase, a speaker said at the annual Cotton Roundtable. Cotton acreage has decreased from over 15.3 million acres about eight years ago to an estimated 7.2 million acres this year.

Most of this drop is in the interior provinces where farmers have switched to growing less intensive crops, said Joe Nicosia, senior head of cotton and merchandising for Louis Dreyfus commodities in Memphis at the roundtable held in New York Stock Exchange in New York City recently.

Currently, China has a huge cotton stock of more than 50 million bales. Once this stock is exhausted, China will become a big cotton importer, according to Nicosia.

China is the world’s largest consumer of cotton. China’s cotton stocks are being depleted at a rapid pace due to decrease in production. “In two or three years, we could see China become an importer of 15 million bales again per year,” said Nicosia.