Production in the European Union is expected to fall by 20 percent to 430,000 tons. The reform of the EU cotton regime significantly affected Spanish yields, and production is now forecast at 40,000 tons, or less than half of last season's production.
Cotton area is expected to increase by almost 300,000 hectares to 3.4 million hectares in the Southern Hemisphere in 2006/07. Significant area increases are expected in South America, in particular Brazil and Argentina, whereas Australian cotton area is forecast down 37 percent to 210,000 hectares due to drought conditions.
World cotton consumption is forecast at 25.6 million tons in 2006/07, up 3 percent from last season and still driven by China (Mainland).
Consumption in China (Mainland) is forecast at 10.2 million tons this season,accounting for a record 40 percent of projected world cotton consumption. World cotton imports are projected at 9 million tons in 2006/07, down 5 percent from the record reached in 2005/06.
World imports have become increasingly dependent on Chinese imports since 2000/01. Imports by China (Mainland) are projected at 3.7 million tons in 2006/ 07; this would represent 40 percent of world imports compared to 1 percent in 2000/01 and 27 percent in 2003/04.
However, there is significant uncertainty regarding projected 2006/07 Chinese imports due to lack of information on Chinese consumption and the intention (buying or selling cotton) of the China's National Cotton Reserves Corporation.
World cotton stocks are projected at 11.6 million tons in 2006/07, down 3 percent from last season.
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