Cotton prices surge to highest since 1995
Thursday, 7 October 2010
WASHINGTON, Oct 6 (Commodity Online): International cotton prices have increased almost continuously since April 2009.
The rise in prices has been particularly steep since August 2010, according to International Cotton Advisory Commitee (ICAC). The Cotlook A Index reached 115.60 US cents per pound on September 29, 2010, 80 per cent higher than at the same date last year and the highest value reached since May 23, 1995.
The recent firm increase in cotton prices is mainly the result of strong market fundamentals rather than speculation. World cotton stocks fell by 24 per cent to 9.0 million tons in 2009/10.
This marked the end of a five-year period of high stocks. World cotton production is expected to rebound by 16 per cent to 25 million tons in 2010/11, encouraged by the significant rise in prices experienced last season.
Global cotton mill use should continue to recover, however more slowly than in 2009/10 due to limited available supplies and high prices of the fiber.
As production and consumption are forecast to roughly balance in 2010/11, world ending stocks are not expected to increase significantly. These perspectives, added to concerns about the damage caused to Pakistan's 2010/11 cotton crop by the August floods, expected harvest delays in China and India, and concerns about restrictions in shipments by a major exporting country, have supported cotton prices in the first two months of 2010/11.
The rise in prices has been particularly steep since August 2010, according to International Cotton Advisory Commitee (ICAC). The Cotlook A Index reached 115.60 US cents per pound on September 29, 2010, 80 per cent higher than at the same date last year and the highest value reached since May 23, 1995.
The recent firm increase in cotton prices is mainly the result of strong market fundamentals rather than speculation. World cotton stocks fell by 24 per cent to 9.0 million tons in 2009/10.
This marked the end of a five-year period of high stocks. World cotton production is expected to rebound by 16 per cent to 25 million tons in 2010/11, encouraged by the significant rise in prices experienced last season.
Global cotton mill use should continue to recover, however more slowly than in 2009/10 due to limited available supplies and high prices of the fiber.
As production and consumption are forecast to roughly balance in 2010/11, world ending stocks are not expected to increase significantly. These perspectives, added to concerns about the damage caused to Pakistan's 2010/11 cotton crop by the August floods, expected harvest delays in China and India, and concerns about restrictions in shipments by a major exporting country, have supported cotton prices in the first two months of 2010/11.