Mexican cotton output forecast to decline in MY 2006/07
19 May '06
3 min read
Production According to the CMCA, the planted area for cotton will reach only 115,000 hectares (ha.) in MY 2006/07, an 11.5 percent decrease from the revised MY 2005/06 planted area estimate of 130,000 ha.
Mexican farmers chose to scale back on cotton production because two factors increased the production risk profile for this crop:
1. The Mexican Ministry of Agriculture (SAGARPA) waited until late in planting season to announce the details of the MY 2006/07 Cotton Price Support Program. and
2. Many farmers are concerned with new outbreaks of white fly, which can severely damage cotton production. In MY 2005/06 white fly infestation affected several cotton producing states, especially Sonora and Sinaloa.
Production Policy On November 16, 2005, SAGARPA announced in the Diario Oficial a support payment of U.S. $0.64 per pound of cotton, and an additional government support of U.S. $0.0375 per pound for those growers who had engaged in forward contracts of between U.S. $0.64 - .67 per pound.
Trade MY 2006/07 cotton imports are forecast to remain practically unchanged at 1.562 million bales as result of weak demand from the textile industry.
Textile Industry As already noted, Mexico's textile industry is facing sluggish demand and strong foreign competition. According to the National Institute of Statistics, Geography, and Computer Science (INEGI), in 2005 textile output declined by approximately 2.6 percent compared to 2004.
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