Interviews
Cotton consumption estimated to be down by 13% - ICAC
29 May '09
5 min read
He added by saying, “Chinese cotton mill use is expected to recover a little bit to 9.180 million tons in 2009-10, so the gap between mill use and production in China in 2009-10 is projected at 1.7 million tons. The Secretariat is forecasting Chinese imports to reach 1.7 million tons in 2009-10, up from 1.45 million tons in 2008-09.
“However, the Chinese government has purchased 2.7 million tons of the 2008-09 crop and this large amount of cotton is currently stored in the national reserve and if the Chinese government decides to sell significant amounts of cotton in 2009 and 2010, Chinese imports in 2009/10 could go below 1.7 million tons”, he concluded by saying.
Finally we asked him to give his views on the projected price trends till the end of the ongoing cotton season, to which he said, “Taking into account the expected significant increase in the stocks-to-mill use ratio in the world, minus China in 2008-09 and the average Cotlook A Index between August 2008 and April 2009, the ICAC Price Model 2007 projects the season-average Cotlook A Index at 59 cents per pound in 2008/09, down by 19 percent from last season.
“The 95 percent confidence interval ranges from 57 to 62 cents per pound and based on this price forecast for 2008-09 and the expected increase in stocks, the ICAC Price Model forecasts a season-average Cotlook A Index of 57 cents per pound in 2009/10, with the 95 percent confidence interval being between 46 and 65 cents per pound, however, major uncertainties regarding projected cotton trade in 2009-10 pose substantial downward risks to the forecast”, he closed the interview by answering.
“However, the Chinese government has purchased 2.7 million tons of the 2008-09 crop and this large amount of cotton is currently stored in the national reserve and if the Chinese government decides to sell significant amounts of cotton in 2009 and 2010, Chinese imports in 2009/10 could go below 1.7 million tons”, he concluded by saying.
Finally we asked him to give his views on the projected price trends till the end of the ongoing cotton season, to which he said, “Taking into account the expected significant increase in the stocks-to-mill use ratio in the world, minus China in 2008-09 and the average Cotlook A Index between August 2008 and April 2009, the ICAC Price Model 2007 projects the season-average Cotlook A Index at 59 cents per pound in 2008/09, down by 19 percent from last season.
“The 95 percent confidence interval ranges from 57 to 62 cents per pound and based on this price forecast for 2008-09 and the expected increase in stocks, the ICAC Price Model forecasts a season-average Cotlook A Index of 57 cents per pound in 2009/10, with the 95 percent confidence interval being between 46 and 65 cents per pound, however, major uncertainties regarding projected cotton trade in 2009-10 pose substantial downward risks to the forecast”, he closed the interview by answering.
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