Agriculture

Farmers cut cotton acreage as prices slump

Plantings will drop to 9.73 million acres in the season beginning 1 August from 11.04 million a year earlier.
Farmers cut cotton acreage as prices slump

Cotton farmers in the US, the largest exporter, will probably cut acreage to the smallest since 2009 after prices fell in January to a five-year low, analysts said.

Plantings will drop to 9.73 million acres in the season beginning 1 August, from 11.04 million a year earlier, as farmers switch to other crops including peanuts, according to the average estimate of nine traders and analysts surveyed by Bloomberg News. The National Cotton Council is set to release its planting-intentions survey on 7 February.

US growers will join farmers in India and China in cutting acreage, reducing the next global harvest by more than 6 percent to 24.6 million tonnes, the lowest in six years, the International Cotton Advisory Committee said on 2 February. Output will trail consumption by about 100,000 tonnes, the Washington-based group said.

While the deficit won’t significantly reduce world stockpiles, supplies of high-quality US cotton will tighten, pushing up prices for fiber delivered in December, said Louis Rose, an industry consultant in Memphis, Tennessee. The December contract on ICE Futures US in New York will rise to 70 cents a pound the next two months, from as low as 62.72 cents on 3 February, he said.

As of 22 January, the US sold 8.978 million bales of this season’s upland cotton crop, or 830,200 bales more than a year earlier, according to the US department of agriculture. “If we draw down these stocks at the rate which we’re exporting right now, prices will have to move up to get cotton planted,” Rose said.

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