“The ICAC pegged cotton inventories ending the season at 11.2m tonnes (52m bales), their highest for three years. ..The
ICAC however said consumption will grow by just 1.2%, as high prices
feed a trend which has already resulted in some shifts in fibre blends
at the spinning level, to the benefit of polyester. ..While
failing to give detailed reasoning behind its forecasts, the
intergovernmental group predicted a rebound in world production to 27.3m
tonnes, surpassing by more than 600,000 tonnes the record set four
years ago. ..”The share of cotton in global fibre use, estimated at 36.5% in 2009, will likely continue to decline in 2010 and 2011.” ..The
estimates imply a stocks-to-use ratio – an important gauge of a
commodity’s supply, and therefore of the price it can command – of 44%
in 2011-12, higher figure than the current season’s 38%, and approaching
the 10-year average of 48%. ..The last time the ratio was at 44%,
six years ago, the benchmark Cotlook A price index averaged 52.2 cents a
pound, less than half its levels so far in 2010-11. ..However,
the committee stopped short of making a price forecast for 2011-12, and
indeed restated doubts over its estimate of 95 cents a pound for the
current season, given futures which in both New York and Zhengzhou in
China have begun a habit of moving the maximum allowed by exchange
limits. ..”The ICAC Secretariat acknowledges that in the current
environment of volatility, the ICAC price model may be less relevant
than in other seasons,” the committee said. ..For 2010-11, the
committee lowered its estimate of world cotton consumption by 400,000
tonnes, flagging “limited available supplies and high prices”. ..Indeed,
the output forecast was lowered too, by 300,000 tonnes to 25.0m tonnes,
reflecting setbacks to some northern hemisphere crops, with southern
hemisphere producers set for “bumper” harvests. ”