Washington, DC, USA
October 1, 2009

World cotton production is projected at 23.1 million tons in 2009/10, 1% lower than in 2008/09. A small World cotton production is projected at 23.1 million tons in 2009/10, 1% lower than in 2008/09. A small drop in cotton area is expected to be partially offset by a small increase in the average yield. Production is expected to increase in India, the United States, Pakistan and Australia, and to decrease in China and Brazil. Cotton plantings in the southern hemisphere will start in large scale in October. Cotton area in this part of the world is expected to remain stable in 2009/10.

Cotton mill use is expected to recover by 2% in 2009/10, to 23.6 million tons, based on a small recovery in world economic growth. Cotton mill use is forecast to start recovering in the “Top 3” (consuming countries), which are China, India, Pakistan, after declines last season. Mill use is also forecast to increase in smaller Asian countries, including Bangladesh and Vietnam, where cotton mill use kept increasing in 2008/09 despite the crisis. However, further declines in cotton mill use are projected in a number of countries in Europe, the Americas, and East Asia.

World cotton imports are projected up by 5% to 6.9 million tons. Chinese imports are forecast up by 8% to 1.6 million tons in 2009/10. Imports by countries other than China, including Pakistan, Turkey, Bangladesh, Indonesia, Thailand, and Vietnam, are also expected to increase in 2009/10. US exports are projected down by 20% to 2.3 million tons due to increased competition from other countries. Exports from India could rebound to 1.4 million tons.

Based on an expected lower stocks-to-mill use ratio in the World-less-China in 2009/10, the ICAC Price Model 2007 forecasts a season-average Cotlook A Index of 64 U.S. cents/lb in 2009/10 (the 95% confidence interval is between 56 and 73 cents/lb). This would represent a 5% increase from the 2008/09 average.

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Website: http://www.icac.org

Published: October 5, 2009