Global Cotton Surplus ICAC World Cotton Prices Will Remain Low

An intergovernmental organization has issued a warning:

Cotton prices may continue to remain low after a "bleak" supply and demand outlook.

The latest report of the International Cotton Advisory Committee (ICAC) said that the 2012/13 market year (ending July 31st next year) will lead to 16 million 400 thousand tonnes of global cotton stocks.

This inventory level increased by 17% over the previous year, which contributed to some of the increase in inventories, slowing global economic growth and slowing the economy.

Product retail procurement constitutes pressure.

ICAC also said that output was still high, although cotton prices fell sharply last year, but this year's output has only decreased by 5%.

The price of cotton growing season is higher than the average level. Some main cotton producing countries have issued support policies, and the weather is very good. These factors are beneficial to cotton production.

Cotton outlook shows that the world's cotton production and textile mill consumption will reach 25 million 900 thousand tons and 23 million 400 thousand tons respectively, and the surplus cotton will be 2 million 400 thousand tons.

Although low cotton prices may increase the amount of global cotton mill in 2012/13 by 3%, the current cotton consumption is changing from China to other Asian countries.

This is because the Chinese government supports the policy of domestic cotton growers. The lowest purchase price is very high, leading to the fact that Chinese textile mills are becoming less competitive.

China's Textile Group is turning to yarn imports, and yarn imports have increased significantly since the beginning of 2012.

At present, the Secretariat expects that the amount of cotton mill in India, Pakistan, Bangladesh, Uzbekistan, Indonesia, Vietnam and Thailand will increase.

After a sharp rise in 2011/12, the global cotton trade is expected to decrease by 21% this year, only 7 million 700 thousand tons due to the decline in demand in China.

However, imports from other parts of the world may increase by 18%.

Exports of the largest cotton exporters will be reduced, especially in India, mainly due to increased domestic consumption.

2012/13 Cotlook A index is 0.83 cents / pound, more than half of 2010/11 average price of 1.64 US dollars, far from last year's price of 1 US dollars.

But international delivery in March 2013

In contrast, even this price is optimistic. In November 5th, the ICE Intercontinental Exchange, the US exchange, delivered a cotton price of 0.71 cents / pound in March 2013.