Washington, DC
April 1, 2008
Source:
International Cotton Advisory
Committee
World cotton area is projected to
remain relatively stable in 2008/09 at 33.8 million hectares.
However, cotton harvested area in the USA is projected to
decline by a further 15% in 2008/09 as a result of surging
prices for soybeans, corn, wheat and other oilseeds. Reduced
cotton plantings in the USA could be offset by increases in
China (Mainland), India, the African Franc Zone, Australia and
Brazil, while stable area is projected for Pakistan, Turkey and
Uzbekistan.
World cotton production in 2008/09 is projected at 26.9 million
tons (+3%), while cotton mill use is projected to grow at a
lower rate of +1% compared with 2% in 2007/08 and 7% in 2006/07,
due to slower world economic growth and an increase in cotton
prices relative to polyester. As a result of the gap between
world production and consumption, world cotton ending stocks are
projected to decline for the second season during 2008/09 to 11
million tons (-5% from 2007/08, and -13% from 2006/07).
The fundamentals of cotton supply and use alone would suggest a
season-average Cotlook A Index of less than 70 cents per pound
in 2007/08.
However, based on trends in prices during the first eight months
of 2007/08, it is obvious that prices will be higher. Increases
in prices of competing crops, the increasing role of speculative
activity and commodity investment funds may be affecting cotton
prices in ways that are not reflected in fundamental measures of
cotton supply and use.
Considering trends in the Cotlook A Index during the first eight
month of 2007/08 and assuming that the Cotlook A Index
fluctuates between 76 and 83 cents per pound during the rest of
the season, the Secretariat projects that the Cotlook A Index
will average 74 cents per pound during 2007/08. Based on this
forecast for 2007/08, the ICAC Price Model 2007 forecasts a
season average Cotlook A Index of 80 cents per pound in 2008/09
(the 95% confidence interval is between 67 and 93 cents per
pound).
WORLD COTTON SUPPLY AND DISTRIBUTION
|
. |
2006/07 |
2007/08 |
2008/09 |
2006/07 |
2007/08 |
2008/09 |
|
. |
Million Tons |
Million Bales |
|
Production |
26.74 |
26.04 |
26.9 |
122.8 |
119.4 |
123.4 |
|
Consumption |
26.65 |
27.14 |
27.5 |
122.4 |
124.6 |
126.2 |
|
Exports |
8.11 |
8.5 |
8.72 |
37.3 |
39.1 |
40.0 |
|
Ending Stocks |
12.70 |
11.6 |
10.96 |
58.1 |
53.1 |
50.3 |
|
Stock adjustment |
0.0 |
0.2 |
-0.26 |
0.0 |
0.0 |
+1.4 |
|
Cotlook A Index* |
59.15 |
74* |
80*** |
59.15 |
74* |
80*** |
|
* Season-average Cotlook A Index
(U.S. cents per pound).
** The price projection for 2007/08 represents the Secretariat
judgment, based on the average price for the first seven months
and projected price variations during the rest of the season.
*** The price projection for 2008/09 is based on the ending
stocks/consumption ratio in the world-less-China (Mainland) in
2006/07, in
2007/08 (estimate), and in 2008/09 (projection), and on the
ending stocks/consumption ratio in China (Mainland) in 2006/07
and in 2007/08 (estimate). 95% confidence interval: 67 to 93
cents per pound.
PDF version:
http://www.icac.org/cotton_info/publications/press/2008/pr_april_08.pdf
The International Cotton
Advisory Committee is an association of 41 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 |
|
