Experts Predict That The Outlook For Us Cotton Exports Is Still Bleak.

This year (2019) early in, the United States due to abundant rainfall moistening dry land, prompted cotton farmers to expand the area of cotton cultivation, estimated to increase by 13% over the year (2018), but after the summer, because of the hot climate, the average yield of cotton per acre decreased significantly (the US Department of agriculture estimated 833 bags per mu, less than last year's 864 pack bale, 480 pounds per pack), and the export volume was also dragged down by the US China trade war. Although the US China trade negotiations reached an agreement, the dawn of the cotton farmers could breathe a sigh of relief, but limited by other factors, the outlook for the experts was still bleak.

The United States has more than 3/4 branches of cotton for export. Mainland China is one of the biggest buyers. Influenced by the US China trade war, the US cotton exports to China are in decline. Data from Cotton Inc., North Carolina, show that in the year of 2005-06, the Chinese mainland imported 9 million 100 thousand cotton packages from the United States, and only 1 million 600 thousand packages were imported last year.

In addition, the sharp depreciation of Brazil currency makes Brazil cotton more attractive than American cotton. Brazil's cotton exports continue to grow, resulting in a reduction in US cotton export earnings and the greatest impact on Dezhou, the largest exporter of cotton in the United States.

Affected by these factors, it is estimated that the domestic cotton stocks in the US will increase to the highest level in 2009 in 2019. The surge in cotton inventories has resulted in a 8.2% decline in cotton futures prices last year and a further decline of about 10% this year. The current transaction price is close to 65 cents per pound, far below the 93 cent in June 2018.

Cotton farmers say that the government's subsidy is only a drop in the bucket. If cotton prices do not rise to more than 70 cents in the next few months, it will be difficult to meet the balance of payments and debt repayment, thus reducing investment and purchasing new equipment. The US Department of Agriculture estimates that the US cotton planting area will be reduced by 13% in 2020 compared with this year.