Historical Revisions to Indian's Cotton Balance Sheet - USDA

Historical revisions have been made to India’s balance sheet for the years 2002/03 through 2013/14, with the stock adjustment carried forward. Previous USDA estimates for India were based on the assumption that the end of November was when stocks were at their lowest point, and reflected the ending stocks for the USDA August-July marketing years that provided adequate stocks to meet demand through November. The revisions are based on the conclusion that market yard arrivals data underreported arrivals in the early portion of the harvest season. This conclusion was based on observed market activity in November for several years. With more arrivals in October, less old-crop cotton needed to be carried over to meet stock requirements in the fall. Minor adjustments were made to production (decreases of 1-2 percent in 6 years) and consumption (increases of less than 1 percent in 4 years); additionally, the losses in 2012/13 and 2013/14 were adjusted to reflect the need for less ending stocks. The cumulative effect of these changes results in a nearly 25-percent reduction of ending stocks for the 2018/19 season (see table below).

Even with these changes, the USDA ending stock levels, adjusted to the local marketing year, remain higher than many other published estimates, specifically the Cotton Advisory Board (CAB) of India. With the larger October arrivals factored in, CAB stock levels appear too low in light of reported market activity in the October-November period.