\nIf the projections by the US Department of Agriculture (USDA) are accurate, it will mark the end of China\u2019s dominance of the global cotton market just as Beijing scraps its stockpiling program. The state reserve\u2019s purchasing has supported the country\u2019s farmers and boosted global prices for the past three years.
\nIt also comes as the country\u2019s textile industry loses its competitive edge with soaring labor and raw material costs forcing some yarn makers to shift production overseas.
\nThe estimate also marks the first official nod from the USDA, whose crop estimates are often used as a benchmark across global agricultural markets, to an inflection point in world cotton supply and demand.
\nThe switch by the two top growers had been expected after Chinese farmers cut plantings amid uncertainty over the state support program and a planting frenzy in India since August after a late monsoon favored growing conditions.
\nBut shrinking local output will force China\u2019s mills to import more foreign supplies once they have eaten through inventories that have swelled to over 60 million bales.
\n\u201cWe\u2019re at the beginning of this transition where China will use its stocks, and in four or five years, they may become a big net importer again,\u201d said Peter Egli, director of risk management at British merchant Plexus Cotton Ltd.
\nWhile China\u2019s acreage is expected by many traders and analysts to be on a long-term downtrend, farmers in India may be protected by government support programs.
\nIn its report on Thursday, the USDA hiked its estimate for India by 1 million bales to 30 million 480-lb bales of cotton for the 2014\/15 crop year that began on Aug. 1.
\nThat would be down from the country\u2019s estimated 2013\/14 output of 31 million bales, but high enough to propel the country into top spot for the first time since USDA records began in 1966.
\nChina, which has been the largest producer for over 30 years, is projected to cut output for a second straight year with output of 29.5 million bales this year, down from 32 million bales last season.
\nOutput peaked at 37 million bales during the 2007\/08 crop year and production has hovered near those high levels since the government in 2011 launched a stockpiling initiative that kept local prices high, drove huge demand for imports, and caused the nation\u2019s inventories to balloon.
\nIndia\u2019s output meanwhile took off sharply in the early 2000s. The country surpassed the United States as the world\u2019s second-largest producer in the 2005\/06 season. \u201cIt\u2019s not been a question of if India will become No. 1. It\u2019s been a question of when,\u201d Egli said.<\/p>\n","protected":false},"excerpt":{"rendered":"