Supply and demand estimates suggest that the Cotlook A Index will average 48 cents per pound this season, 20 cents, or 30%, lower than the last season. This will be the sharpest drop in absolute terms since 1985-86, and 1974-75 in relative terms. .
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The world cotton supply, beginning stocks plus production, is rising sharply to an estimated 31.8 million tonnes in 2004-05, up 2.7 million tonnes (9%) from the last season. .
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This is the highest world supply ever, six lakh tonnes above the previous record in 2001-02. In volume and in percentage terms, this will be the largest year-to-year increase in world supply since 1984-85. .
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Beginning stocks shrank from 10.5 million tonne in 2002-03 to an estimated 7.7 million tonne on August 1, 2004, the lowest since 1995-96. .
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However, rising prices in 2003, good weather and the use of new technologies are leading to world production soaring from 20.6 million tonne in 2003-04 to an estimated 24.1 million tonne in 2004-05, more than offseting the reduction in beginning stocks. World production in 2004-05 is expected to increase 3.5 million tones from last season (17%), and exceed the previous record of world production set in 2001-02 by 2.6 million tonnes. Increases in production are expected in almost all producing countries which is quite exceptional. .
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World cotton consumption in 2004-05 is being stimulated by lower prices, combined with improving world economic growth despite higher oil prices. Cotton is expected to remain competitive with polyester. .
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As a result, world mill use is forecast to grow by about 3% in 2004-05 to reach a record of 22 million tonnes, up six lakh tonnes. .
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World cotton exports are expected to decline from a record of 7.3 million tonnes last season to 6.7 million tonne in 2004-05.
As supply is expected to exceed consumption in 2004-05, world ending stocks are forecast to inflate by 2.1 million tonnes to 9.8 million tonnes by July 31, 2005..
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Source: Bharattextiles.com.
Date:11/7/2004
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