Historical Adjustments to China’s Cotton Supply and Demand Estimates Lead to Lower 2023/24 Beginning Stocks.

Cotton estimates for China play a major role in the global supply and demand outlook. China is by far the single largest cotton spinning country—contributing one-third of global cotton mill use—and is the largest stockholder—accounting for nearly half of the world’s surplus stocks each year. China is also among the leading cotton producing and importing countries. China’s prominence in the global cotton market emphasizes the importance of USDA’s China cotton supply and demand projections, with back-year estimate adjustments sometimes deemed necessary after reexamining historical data or considering additional information. The August 2024 revisions to China’s supply and demand balance sheet for 2015/16–2022/23 are a reevaluation of previous production, use, and stocks data. During the 8-year period, China’s cotton area and production outside of Xinjiang declined due to subsidy policy changes and decreased faster than previously estimated. The non-Xinjiang revisions led to a cumulative production decline of 3.95 million bales (figure 9). In addition to the decreased production, a loss was contained in the August 2024 revisions that lowered stocks further. China auctioned domestic cotton from its reserves in 2021/22. However, large supplies from the 2011/12–2013/14 crops remained after the sales program ended and that cotton was never sold. To account for the unusable supplies, a loss adjustment of 625,000 bales was included in 2021/22. Partially offsetting the loss were annual revisions to China’s cotton mill use during 2018/19–2022/23 that resulted in an aggregate mill use reduction of 350,000 bales. Based on these adjustments, China’s cotton stock estimates over the 2015/16–2022/23 period were lowered a total of 4.225 million bales. Ending stocks for 2022/23 are now projected lower at 33.1 million bales. While USDA’s estimates of China’s stocks remain sizeable— approximately half of the global total—the historical revisions provide an important foundation for subsequent cotton supply and demand estimates for China and the world.