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China, economy, weather key factors in cotton's outlook
13 Feb '12
4 min read
"However, economists are quick to note the potential for significant downside risks, with much of the concern based on the continuing debt crisis in Europe," Adams said. "Assuming the financial crisis in the Eurozone remains fairly well contained, global economic recovery should provide a climate for modest cotton demand growth. However, demand growth will increasingly be driven by consumers in developing economies. In those markets, demand for cotton textiles and apparel will be very sensitive to relative prices of cotton and polyester."
Adams concluded by reminding delegates about the sharp price swings in 2011.
"That type of volatility did not serve the interests of any industry segment," he said. "Few growers had cotton to sell at those very high prices. Some textile mills were caught up in a wave of panic buying without corresponding yarn orders. Also, cotton merchandisers were caught up in the fallout from the dramatic price swings as sales cancellations and arbitrations sharply increased."
Adams concluded by reminding delegates about the sharp price swings in 2011.
"That type of volatility did not serve the interests of any industry segment," he said. "Few growers had cotton to sell at those very high prices. Some textile mills were caught up in a wave of panic buying without corresponding yarn orders. Also, cotton merchandisers were caught up in the fallout from the dramatic price swings as sales cancellations and arbitrations sharply increased."
National Cotton Council
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