Economic slowdown could weigh on cotton prices.
The International Cotton Advisory Committee (ICAC) has cut global demand estimates for the fiber, signaling that slower global economic growth and ample supplies could place downward pressure on prices.
Egytex News Desk
Source: www.mrketplace.com
The latest forecast released this week by the inter-governmental group sees world cotton demand for the 2012-13 season, which ends on July 31, down by more than 510,000 tons from earlier estimates. It blames slower global economic growth.
The ICAC described a recent “improvement” in demand for cotton as a “short-term respite.” It added that purchases by the Chinese government have also contributed to price stabilization, but that the medium-term outlook regarding world cotton mill use is “still overcast.”
International cotton prices steadied at around $1 per pound in January 2012 after decreasing for almost ten months.
World cotton mill use is projected to be down by 3% in 2011-2012 to 23.7 million tons — and could begin to rise again the following season if the health of global economy improves.
Global cotton production is rising by an estimated 7% in 2011-2012, to 26.8 million tons — the largest level of production achieved in five years — but could drop to 24.9 million tons in 2012-2013 if farmers switch to higher priced grains and soybeans.
The large excess supplies in 2011-2012 mean global cotton stocks are set to rebound by a third to 12.3 million tons, following two seasons at relatively tight levels. Production is expected to continue exceeding consumption in 2012-2013, which could translate into further increases in global cotton stocks, to 12.9 million tons.
Source: www.mrketplace.com
From the Egytex news archive, first published on 6 February 2012. Figures and names are as reported at the time.
