Home / Knowledge / News / Textiles / Slowdown to affect worldwide consumption of cotton
Slowdown to affect worldwide consumption of cotton
04
Oct '08
The joke about economists is that we have predicted 12 of the past 4 economic recessions. Well, I think I have already called the market bottom three times in the past ninety days and the market still wants to move lower. I will refrain from calling the current low a bottom, at least for now.

The only credits I can take have been the calls that outside markets would be more important to the direction of cotton prices and that once cotton traded on its own fundamentals, then the high forties to low fifties were possible. Yet, I was foolish enough to say that it would not go that low. I am not that bearish simply because of the negative outlook for 2009 plantings. Business Week has an informative background story regarding a potential decline in 2009 U.S. plantings.

We have long talked that other markets would control price direction more so than cotton fundamentals. Certainly the Wall Street meltdown, principally led by the debt crisis, has controlled all markets the past two weeks, if not from behind the scenes for the past three months.

Too, we have discovered that the debt crisis has spread through Europe just as if were the 14th Century plague that so ravaged the continent. The economic difficulties that have spread across Asia the past six months were highlighted by a decline in consumer activity and were conspicuously noticeable in cotton consumption. While today's supply of cotton is overwhelming the market, the major culprit is the downturn in global cotton consumption. The 2008 world crop will be smaller than currently predicted, but consumption will also fall further.

Export sales continue to disappoint cotton traders, but have proved to be a boom to international textile mills. Remembering a year ago, when we “thought” world economic conditions were in excellent health, cotton consumption was expected to continue to grow and that production would decline; it was not even possible that cotton prices could fall below 65 cents. Of course, the market typically does the “impossible.” Always remember, “The market is a tough taskmaster; it gives the test first and the lesson afterwards.”

In March, our predictions seemed to be prophetic as cotton soared to one dollar a pound. Now, like the legendary Icarus of Greek mythology that sailed so high that the sun melted its wings and sent it crashing back to earth; so has gone the world economy; thus, the outlook for cotton consumption is very much in doubt.

U.S export sales for the week ending 9/25/2008 fell to a net of 111,900 RB. Upland sales were 110,400 RB with principal sales being made to Turkey (19,100 RB); Indonesia and Thailand. Sales of Pima cotton totaled 1,500 RB with the primary buyers being Hong Kong (800 RB); Japan and Indonesia.

Shipments were also below the level need to meet USDA's reduced forecast. Exports totaled 235,200 RB with Upland shipments accounting for 232,500 RB and Pima shipments at 2,700 RB. Primary destinations of Upland were China, (88,600 RB); Indonesia and Turkey. Pima shipments included Japan (800 RB); South Korea and Indonesia.


Must ReadView All

Textiles | On 20th Sep 2017

India needs to double cotton farmers’ income: top official

India needs to double the income of cotton farmers and non-farmers...

Textiles | On 20th Sep 2017

Pakistan seeks more JVs with China: textile minister

The Pakistani Government wants to forge more joint ventures (JVs)...

Apparel/Garments | On 20th Sep 2017

Egypt’s garment exports touch $941 million in 8 months

Egypt's garment exports touched $941 million in the first eight...

Interviews View All

Abhishek Ganguly
Puma India

‘As a brand, Puma is always looking for new and innovative ways to inspire ...

Marazban F Velati
Sutlej Textiles & Industries limited

No training can be effective till the candidate believes in it.

Cindy McNaull
Cordura

We have broad range of options in durable fabrics

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Robert Brunner
Devereux

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

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Prathyusha Garimella
Prathyusha Garimella

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

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

September 2017

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


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