Mexico sets 2011-16 plan to boost cotton output

Mexico is launching a six-year program to increase cotton production to 2.4 million bales by 2016, a member of an industry group was quoted as saying on Sunday. In a release distributed by Mexico's Agriculture Ministry, Jorge Medina, a representative for the Cotton Product System, said Mexico's current annual production is around 620,000 bales.
This year alone, the program will bring the production area to 175,000 hectares (432,400 acres) from a previous outlook of 107,000 hectares. The plan will trigger production in places such as Tamaulipas, La Laguna, Chihuahua, Baja California and Sonora to reach 300,000 hectares in 2016. Cotton prices rallied to a peak of $2.27 per lb in the first quarter of the year, as tight supplies and robust demand, especially from top consumer China, fuelled the charge.
The US Department of Agriculture has estimated global cotton production could increase 7.5 percent in 2011/12 as relatively high returns have seen a huge increase in global acreage. Still, the USDA forecast the 2011/12 world stocks-to-use ratio to be the third lowest since 1994-95.