USDA Forecasts A Higher Production for 2024/25 Season

Compared to the data from previous month, the fluctuations in the 2024/25 balance sheet continued to narrow, with production remaining the focus for the market. Specifically, the 2024/25 production has been revised upward by 50,000 tons to 25.4 million tons, primarily due to an increase of 70,000 tons in China and 20,000 tons in Brazil. In contrast, the United States has adjusted its production downward by 70,000 tons to 3.09 million tons due to the adverse impact of recent hurricanes and other extreme weather, with no changes made to the production estimates of other major producing countries. Additionally, the USDA revised the beginning stocks down by 90,000 tons, and both import and export estimates were lowered by 110,000 tons, resulting in an ending stock reduction of 30,000 tons to 16.62 million tons.

Overall, as the harvesting and arrival progress in major producing countries advances, future production adjustments are expected to be relatively limited. In the short term, the main focus will still be on the production expectations in the United States and China, as well as the marketing situations in Pakistan and India. According to our statistics, there has been a significant decline in the new cotton arrivals in both India and Pakistan compared to the previous year. As of Oct 6, 2024, the cumulative arrivals for the 2024/25 season in India was 179,800 tons, representing a year-on-year decrease of 53%. As of Sep 30, the cumulative new cotton arrivals for Pakistan in the 2024/25 season reached 316,000 tons, down 59% from the previous year. This decline stems partly from a reduction in planting area and partly due to weather factors affecting the harvesting progress.