“Demand from spinning mills was strong in the first half of this
season, but is now much weaker. Spinners, faced with high prices of
cotton and difficulties to access credit on the one side, and declining
prices of cotton yarn on the other side, have reduced their activity.
Stocks of cotton yarn have accumulated at many mills”
.Prices of chemical fibers have remained much lower than cotton
prices, encouraging an increased switch to chemical fibers at the
spinning level. Cotton mill use is expected to rise by 3% to 25.2
million tons in 2011/12, driven by projected global economic growth and
boosted by increased production, but moderated by relatively high cotton
prices and competition from chemical fibers .
.World cotton production is expected to increase by 11% to 27.4
million tons in 2011/12, driven by the high cotton prices received by
farmers in 2010/11. Production will grow in most large producing
countries, with the exception of the United States .
.Global cotton trade is projected up by 5% to 8.2 million tons in
2011/12, fueled by larger production and consumption. Imports by China
are expected to increase by 24% to 3.3 million tons, assuming a rebound
in mill use and a rebuilding of stocks from historically low levels. The
increase in exports will be driven by Brazil and Australia, while U.S.
exports could decrease due to reduced exportable supplies .
.The Cotlook A Index averaged $1.64 in 2010/11, 112% higher than in
the previous season. The Secretariat believes that the season-average
Cotlook A Index will decline significantly in 2011/12, although it will
probably remain above the 10-year average of $0.60 per pound (2000/01 to
2009/10) .
Date:7/10/2011
Source:Al Ahram Online