World cotton stocks may dip 13pc to 10.7m tonnes
Thursday, 3 December 2009
WASHINGTON, Dec 2 (Commodity Online): Global cotton ending stocks are expected to shrink by 13 per cent to 10.7 million tonnes by the end of 2009/10. This would be the largest decline in stocks since 2002/03, and it is explained by the combination of lower production and rebounding consumption, according to International Cotton Advisory Committee (ICAC)
World cotton production is projected at 22.2 million tonnes in 2009/10, 5 per cent lower than in 2008/09 due to lower yields. This is the third consecutive season of decline in global cotton production, the result of a decrease in price competitiveness of cotton vs. competing crops, and also, in the last two seasons, of a weakening of cotton yields.
The production drop this season is driven by a 16 per cent fall in Chinese production, to 6.8 million tonnes. However, production is expected to increase by 5 per cent to 5.2 million tonnes in India and by 8 per cent to 2.1 million tonnes in Pakistan. US production is forecast slightly lower than last season, at 2.7 million tonnes.
World cotton mill use is projected up by 2 per cent to 23.8 million tonnes in 2009/10, pushed by the global economic recovery. Amongst the seven largest cotton consumers, only the Asian ones (China, India, Pakistan and Bangladesh) are expected to experience growth in cotton mill use during 2009/10. The combined share of these four Asian countries in world cotton mill use is forecast at 70 per cent.
World imports are projected up by 6 per cent to 7.0 million tonnes in 2009/10, driven by stronger mill use. Chinese imports are expected to increase by 15 per cent to 1.8 million tonnes to make up for the smaller crop. Exports from India could rebound to 1.4 million tonnes, driven by a large exportable surplus. However, US exports could decrease by 21 per cent to 2.3 million tonnes.
The Cotlook A Index has increased considerably between September and November. Based on a lower stocks-to-mill use ratio in the World-less-China in 2009/10, the ICAC Price Model forecasts a season-average Cotlook A Index of 69 US cents/lb in 2009/10 (the 95 per cent confidence interval is between 63 and 78 cents/lb). This would represent a 13 per cent increase from the 2008/09 average.
World cotton production is projected at 22.2 million tonnes in 2009/10, 5 per cent lower than in 2008/09 due to lower yields. This is the third consecutive season of decline in global cotton production, the result of a decrease in price competitiveness of cotton vs. competing crops, and also, in the last two seasons, of a weakening of cotton yields.
The production drop this season is driven by a 16 per cent fall in Chinese production, to 6.8 million tonnes. However, production is expected to increase by 5 per cent to 5.2 million tonnes in India and by 8 per cent to 2.1 million tonnes in Pakistan. US production is forecast slightly lower than last season, at 2.7 million tonnes.
World cotton mill use is projected up by 2 per cent to 23.8 million tonnes in 2009/10, pushed by the global economic recovery. Amongst the seven largest cotton consumers, only the Asian ones (China, India, Pakistan and Bangladesh) are expected to experience growth in cotton mill use during 2009/10. The combined share of these four Asian countries in world cotton mill use is forecast at 70 per cent.
World imports are projected up by 6 per cent to 7.0 million tonnes in 2009/10, driven by stronger mill use. Chinese imports are expected to increase by 15 per cent to 1.8 million tonnes to make up for the smaller crop. Exports from India could rebound to 1.4 million tonnes, driven by a large exportable surplus. However, US exports could decrease by 21 per cent to 2.3 million tonnes.
The Cotlook A Index has increased considerably between September and November. Based on a lower stocks-to-mill use ratio in the World-less-China in 2009/10, the ICAC Price Model forecasts a season-average Cotlook A Index of 69 US cents/lb in 2009/10 (the 95 per cent confidence interval is between 63 and 78 cents/lb). This would represent a 13 per cent increase from the 2008/09 average.