With the IMF lowering its forecast of global economic growth, there will be less demand for cotton and cotton stockpiles will remain large and prices stubbornly low, says the International Cotton Advisory Committee. In a monthly report, the intergovernmental body said cotton prices would average 70 cents a pound this marketing year, compared to 71 cents in the previous season. Only two years ago, the season-average price was 91 cents a pound.
World cotton production is falling because of the continued low market price, but consumption is falling nearly as quickly. In China, the top cotton consumer, mill use is projected down by 3 percent and imports to drop by one-third, to 1.2 million tonnes in the face of mammoth stockpiles. China holds nearly 60 percent of the world’s cotton supply and is trying to draw down its stocks. Mill use in Pakistan, the No. 3 cotton user, is forecast by ICAC to fall by 10 percent this season due to smaller sales of yarn to China.