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Growing Cotton Prices Likely To Drop Consumption In 2003 - Global |
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2003-10-9
According to the International Cotton Advisory Committee (ICAC) the growth in cotton prices in international market may lower cotton consumption in 2003.
In 2003-04 the global cotton production is likely to surge to 20.2
million tons, which is about 900,000 tons more than in 2002-03.
ICAC stated that average international cotton prices were 30 per cent higher year on year, while yarn export prices and polyester prices had risen about 10 per cent in September 2003.
As a result, cotton consumption will be negatively affected, ICAC, an association of 42 governments of cotton producing and consuming countries said.
World cotton mill use is forecast to increase by about 2 per cent 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, ICAC said in its forecast.
Because of adverse weather, the 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 per cent this year and 4.1 per cent in 2004. Improved economic performance will have a positive impact on the world textile industry.
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 per cent of world mill use this season, up from 74 per cent in 1993/94.
China (Mainland)’s share of world mill use is expected to reach 32 per cent in 2003-04, nine percentage points more than in 1998-99.
End-use consumption of non-cotton fibre is expected to continue to expand at higher rates than cotton consumption.
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