October 1, 2003

World cotton production is expected to increase to 20.2 million tons in 2003/04, about 900,000 tons more than in 2002/03. World cotton mill use is forecast to increase by about 2% and reach a record 21.2 million tons. With consumption exceeding production for the second consecutive season, world ending stocks, which decreased by 1.8 million tons in 2002/03, are forecast to shrink by another million tons this season to their lowest level in nine seasons. As a result, the average Cotlook A Index is expected to rise from 56 cents per pound in 2002/03 to 64 cents per pound in 2003/04. Higher prices are expected to boost production to a record of 21.9 million tons in 2004/05, outpacing consumption by an estimated 300,000 tons. Thus, the season-average Cotlook A Index is projected to decline to 61 cents per pound in 2004/05.

Because of adverse weather, the International Cotton Advisory Committee (ICAC) estimate of China (Mainland)’s production in 2003/04 has been reduced by over 300,000 tons to 5.4 million tons. The gap with projected mill use this season widened to 1.3 million tons and imports by China (Mainland) are now expected to climb to a record of 900,000 tons in 2003/04, up 200,000 tons from last season.

IMF projections released on September 21 suggest that world GDP will grow by 3.2% this year and 4.1% in 2004. Improved economic performance will have a positive impact on the world textile industry. However, cotton consumption will be negatively affected by higher cotton prices. In September 2003, average international cotton prices were 30% higher on the year, while yarn export prices and polyester prices had risen about 10%. Cotton mill use in developing countries is expected to reach 18.1 million tons in 2003/04, up 600,000 tons from last season. Mill use in developed countries and Central and Eastern Europe is forecast to drop to 3.1 million tons, down 300,000 tons. Developing countries will account for an estimated 86% of world mill use this season, up from 74% in 1993/94. China (Mainland)’s share of world mill use is expected to reach 32% in 2003/04, nine percentage points more than in 1998/99. End-use consumption of non-cotton fiber is expected to continue to expand at higher rates than cotton consumption.

* US cents per pound. Statistical estimates are based on current estimates of supply and use; 95% confidence intervals extend 12 cents per pound above and below each point estimate.

(Press releases are available via e-mail. For further information, please contact us at Publications@icac.org)

The International Cotton Advisory Committee is an association of 42 governments of cotton producing and consuming countries.

The Secretariat of the Committee publishes information related to world cotton production, supply, demand and prices, and provides technical information on cotton production technology. Detailed statistics are found bimonthly in COTTON: Review of the World Situation, $160 per year. A monthly outlook by fax is also available for $300 per year or on the Internet for $250 per year. Access to the weekly estimates of world cotton supply and use by the Secretariat is also available on the Internet for $500 per year.