ICAC foresee world cotton prices may shoot up

04 Jul '05

2 min read

Global cotton production and consumption are expected to face hard situations of imbalance in the year 2005-06 due to the prediction of decline of more than 10 percent comparing the record production in the last year.

While consumption, will sustain to rise with economic growth and rising Asian demand, especially from China.

It is obvious that a delicate balance between production and consumption is driven to disruption if the picture of supply is unclear. Thus, it results higher cost.

International Cotton Advisory Committee (ICAC) has stated that at present market fundamentals put forward the season-average Cotlook A-Index will be 65 cents per pound in 2005-06, 13 cents more than the average anticipated for the year 2004-05.

World cotton output is predicted to down by less than 24 million tons in 2005-06, down 2.4 million tones, and the consumption is expected to hike by 23.8 million tons, which was 23.3 million tons in year 2004-05, with use in Asia expected to see a large development.

The world trade in cotton during 2005-06 is likely to attain of 8.1 million tons. China is supposed to lead the world trade development.

Still, some industry players in the market expect that the China's import prediction is to some extent gaudy. China's imports may end up at 2.5 million tons.

The Indian cotton output expected to register a vigorous volume. However, it is too early to estimate the total crop output.

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