Global cotton prices could jump 15 percent in 2010/11 as demand recovers and world stocks remain tight, an international farm group said on Wednesday. The International Cotton Advisory Committee secretariat said in a monthly report that cotton prices could average 89 cents per lb in 2010/11, but cautioned that the forecast was "unusually susceptible to changes in crop prospects."
The group noted that an expected 15 percent rebound in world cotton production to 25.1 million tonnes would meet expected demand for 2010/11, but tightening stocks would continue to push prices up. ICAC forecast a 2 percent increase in global cotton consumption in 2010/11 with ending stocks remaining at 9.1 million tonnes. The resulting stocks-to-use ratio would dip to a 21-year low at 36 percent, the group said.
China and India are expected to drive the increase in cotton consumption, ICAC said. Chinese imports are estimated up 29 percent to 3.1 million tonnes in 2010/11. An expected 52 percent spike in US cotton production to 4 million tonnes will fuel a 27 percent hike in US cotton exports, the group added. Overall, global cotton trade is forecast up 9 percent to 8.5 million tonnes.