Global cotton imports are forecast to increase by 8 percent to 8.4 million tonnes, the largest level in three years, led by a surge in demand from China, an international farm group said on Thursday. The International Cotton Advisory Committee secretariat said Chinese imports are forecast at 3 million tonnes in 2010/11, up 28 percent.
The United States, which is benefiting from a larger crop and restrictions by its chief competitor, India, will see shipments rise 33 percent to 3.5 million tonnes, a five-year high. Cotton production is expected to increase 16 percent to 25 million tonnes in 2010/11 as farmers take advantage of higher prices to increase plantings.
"The United States is driving the rebound in global production in 2010/11, with an expected crop of 4.1 million tonnes, 55 percent larger than last season, ICAC said in a statement. The group said global cotton mill demand will increase at a slower rate than the past year to 25 million tonnes amid limited supplies and higher prices. A balance between output and demand should leave end stocks at 9 million tonnes, ICAC said.
The season-average Cotlook A Index is expected to increase 14 percent to 89 cents per lb in 2010/11. This would be the highest season-average since 1994/95. "The current increase in cotton prices seems to be driven mostly by market fundamentals, rather than speculation," ICAC said. Early signs point to a rise in world cotton area, production and a small increase in consumption during the 2011/12 growing season. This "could result in a tangible increase in global cotton stocks and a decline in international cotton prices," the group said.
Comments
Comments are closed.