The global economic crisis is set to hit the cotton trade
across the globe. Cotton imports at the global level are expected to decrease
12% to 7.3 million tonne in the current cotton year beginning October 2008.
This has been projected by the International Cotton Advisory Committee (ICAC)
after assuming curtailment in production by textile mills all over the globe
during the year.
ICAC estimates that hit by competition from chemical fibres amid slower global
economic growth, cotton consumption by textile mills would for the first time
witness a negative growth in the current year. Against this backdrop, ICAC
assumes cotton consumption by textile mills would decline 6% to about 24.9
million tonne in the current season, which will subsequently lead to a decline
in cotton imports in coming days.
Apart from the economic downturn, the projected decline in the income of
developed economies in 2009, tightening credit availability for spinning mills
and uncertainty regarding the prevalence of the global financial crisis are the
other factors that will lead to a cutback in global demand for cotton, said
ICAC in its latest report on the world cotton outlook.
The Washington-based global body is an association of governments which have an
interest in production, consumption, export and import of cotton. India, which is the second largest producer of cotton after China, is also a member of the
association. World cotton trade would plummet this year due to
lower-than-expected imports by China. Indications are that China's cotton imports may fall by 24% to 1.9 million tonne. Imports by the rest of the
world are expected to decline 7% to 5.4 million tonne, said the report.
Cotton production across the globe is also expected to decline in the current
season. According to ICAC, world cotton production is expected to decline by 6%
to 24.6 million tonne in 2008-09 due to shrinkage in the area under cotton
cultivation. Though India is expected to increase its production by 3% to 5.5
million tonne, a 30% fall in US production would drive down world cotton
production.
Written by Kolkata Bureau: "The Economic
Times"
Originally
published in "The Economics Times" dated December 04, 2008
