Washington, DC
November 9, 2007Source:
USDA Economic Research Service
By Stephen MacDonald
Outlook Report No. (CWS-07I-01) 20 pp, November 2007
USDA has developed a new
approach for estimating cotton consumption in China based on
textile import and export data, supplementing the traditional
methodology that uses yarn production data from China’s National
Bureau of Statistics. This analysis suggests USDA’s historical
estimates of China’s cotton consumption are reasonable and
USDA’s August 2007 forecast may be conservative. These insights
into the amount of cotton consumed by China’s textile mills,
combined with data on China’s cotton exports and imports,
suggest there may be problems with the official estimates of
China’s cotton production. Uncertainties regarding the level of
production and consumption of cotton in China mean that the
potential remains for unexpected changes in China’s cotton
import demand that could destabilize world commodity markets
despite increased global communication. These unexpected changes
highlight China’s impact on world cotton markets and the lack of
transparency in China’s intervention in its domestic cotton
markets and official cotton stock accumulation.
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