Demand Drives the Cotton Market

Seshadri Ramkumar, Texas Tech University, USA

cottonStrong demand drives the cotton market amidst increased planting intentions in the United States. Cotton industry stakeholders in the High Plains of Texas gathered in Lubbock, this morning with optimistic mood in spite of dense fog to discuss this year’s cotton planting, Washington politics and global demand and market scenario.

There is going to be lot of acres in Texas with about 20% increase in acreage predicted. Recent planting intentions report by the USDA estimates, Texas will have about 22% more acreage this year as against last year. Steve Verett, Executive Vice President of Lubbock-based Plains Cotton Growers, Inc., estimates the increase will be significantly higher in the 1-N region of the High Plains, Central Texas and South Texas areas to achieve the overall increase of 20% in Texas. The High Plains of Texas with 41 counties will have more cotton planted than any other region in the United States, stated, Verett.

The High Plains is expected to have 15% more cotton acres, this year. Shawn Wade, Director of Policy Analysis and Research at Plains Cotton Growers stated that the High Plains of Texas should see its highest planted acreage since 2011. In 2011, it seemed the region planted every acre available for cotton, stated Shawn Wade. The 2017 plantings will probably not reach that level, he said, but should easily reach 4.25 million acres. One would expect with higher planting intentions, market would go down, but December futures is trading at about 75 cents. Demand is strong with China coming into buying, makes the market stand steady. China and Vietnam are buying American crop. At this point of time, US is shipping cotton, which is good according to cotton sales people who were present at today’s meeting in Lubbock.

Global textile industry is in need for quality cotton and reliable delivery schedules.