Home / Knowledge / News / Textiles / International cotton prices jump as stocks tighten
International cotton prices jump as stocks tighten
03
Aug '16
International cotton prices jumped to over 80 cents/lb in the second half of July 2016 from an average of 70 cents/lb for the rest of the season due to tighter stock situation, the International Cotton Advisory Committee (ICAC) has said in its monthly analysis.

“Significantly lower crops in the five largest producing countries and higher than expected demand led to tighter stocks at the end of 2015-16, at which time world ending stocks were estimated to have fallen by 12 per cent to 19.7 million tons,” ICAC said.

While stocks outside of China decreased by 9 per cent, to 8.4 million tons, which is the lowest level since 2010-11, when they reached 8.3 million tons, China's national stocks have reduced by 12 per cent to 11.3 million tons due to strong domestic demand.

Demand for cotton from the Chinese government's reserve has been strong since auctions started in May 2016. On average, 26,000 tons of cotton has been offered daily, nearly all of which has been sold. Total sales through the end of July are around 1.6 million tons, reducing China's national reserve to 9.4 million tons, ICAC said.

In 2015-16, China's cotton production declined by 26 per cent to 4.8 million tons, but cotton mill use in China decreased by 2 per cent to 7.3 million tons, exceeding production by 2.5 million tons. Import quotas limited the total volume of imports to 940,000 tons in 2015-16, and sales from the reserve were used to meet the excess demand.

World cotton demand declined by 1 per cent to 23.9 million tons in 2015-16, but world production decreased by 18 per cent to 21.3 million tons, contributing to the tight supply situation at the end of the season.

Declines in production occurred in the top five producers, which account for 76 per cent of world output. India, the world's largest cotton producer, saw its production fall by 11 per cent to 5.7 million tons in 2015-16. As noted above, China's production declined to 4.8 million tons, while output in the US decreased by 21 per cent to 2.8 million tons. Yields in Pakistan fell to their lowest level since 1998-99, resulting in a 34 per cent drop in production to 1.5 million tons. Output in Brazil declined by 11 per cent, to 1.4 million tons.

In 2016-17, world production is predicted to increase by 8 per cent, to 22.9 million tons. Gains in India, the US, Pakistan and Brazil will offset the loss of production in China in 2016-17. Better cotton prices during the growing season will encourage farmers to use more inputs, such as fertiliser, in order to improve yields and take advantage of higher prices. In addition, weather has generally been more favourable this summer than in 2015.

Although world production is expected to increase in 2016-17, consumption is projected to remain stable at 23.9 million tons. Mill use in China, the world's largest consumer, is forecast to decrease by 3 per cent, to 7.1 million tons, due to high cotton prices, low polyester prices, and limited imports. However, mill use may stage a modest recovery in India and Pakistan, where consumption is projected to increase by 2 per cent, to 5.3 million tons, and by 1 per cent, to 2.2 million tons, respectively.

World imports are forecast to increase by 4 per cent, to 7.5 million tons, as mill use continues to grow in countries that rely on imports. Shipments received by the world's two largest importers, Vietnam and Bangladesh, are expected to rise by 19 per cent, to 1.26 million tons, and 18 per cent, to 1.21 million tons, respectively. (RKS)

Fibre2Fashion News Desk – India


Must ReadView All

Textiles | On 29th Jun 2017

Nan Ya files trade petition in US against Korea & Taiwan

Nan Ya Plastics Corporation, America, a US synthetic fibre producer,...

Textiles | On 29th Jun 2017

Indian textile industry will reach new milestone by 2020

By 2020, textile technologies will be highly advanced not only with...

Apparel/Garments | On 29th Jun 2017

Amazon intends to keep investing and growing in India

American online retail giant Amazon intends to keep investing and...

Interviews View All

Arvind Saraf
Triveni Sarees

e-Commerce is still evolving fast with constant flux and surprises

Sunil Rathore
Lacoste India

‘New vendor is welcome if he offers cost, quality and timely delivery’

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
July 2017

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X