ICAC – Convergence of Cotton and Polyester Prices Should Improve Demand for Cotton

With polyester and cotton prices converging on the world market, the International Cotton Advisory Committee (ICAC) expects world consumption of cotton to increase by five percent to 24.5 million tons in 2014/15.

According to the recent ICAC Secretariat report, many spinners decreased the share of cotton in yarn in favor of greater use of polyester after international cotton prices spiked in 2010/11. At the start of 2013, the gap between cotton and polyester prices widened, as polyester prices remained fairly stable at around 74-76 cents/lb until dropping to 65 cents/lb in April of this year.

During the same period, international cotton prices climbed higher, reaching 99 cents/lb at their peak.

The situation changed significantly in July, with the Cotlook A index falling to 80 cents/lb while polyester has climbed back to nearly 73 cents/lb. Furthermore, the price of cotton in China has also fallen from around 141 cents/lb during most of 2013/14 to around 126 cents/lb in the last few weeks.

In addition to their world forecast, ICAC expects cotton consumption in Asia to grow strongly in 2014/15, led by China’s five percent increase to 7.9 million tons. India’s consumption could grow by six percent to 5.4 million tons. The rest of Asia is projected to expand by eight percent to nearly 2.4 million tons.

World production in 2014/15 is forecast to be 25.5 million tons, down from 26.1 million tons in 2013/14. Although the monsoon has arrived in India, the volume of precipitation has varied widely, and yield is likely to suffer in some places. India’s production is expected to be just over 6 million tons in 2014/15.

On the other hand, China – with average yields nearly three times higher than India – is expected to produce around 6.2 million tons. The United States has experienced abundant rains this season, and its production is projected to grow to nearly 3.5 million tons.

Trade is forecast to decline to 7.9 million tons in 2014/15, driven mainly by a 26 percent fall in imports by China to 2.2 million tons. India’s exports are likely to fall to 800,000 tons, which would be less than half of its exports in 2013/14. Exports from the United States are forecast to rise nine percent to 2.5 million tons in 2014/15.

The Chinese government will close out 2013/14 having sold around 2.3 million tons of cotton, which is 37 percent of the 6.3 million tons purchased this season. As this is the second successive year in which total purchases by the government exceeded sales, government stocks have increased again, and China’s total ending stocks are now estimated to be nearly 11.9 million tons.

World stocks outside China are up six percent to 8.6 million tons. This is the largest volume of world ending stocks outside China since 2007/08, when they reached 8.8 million tons, and is weighing heavily on prices for 2014/15.

 

Source – ICAC

Topics: ,

Leave a Reply

International Stories
International

Next Year’s Indian Cotton Crop to Remain Flat

August 30, 2016

The Indian cotton crop for the next season beginning in October is expected to remain at the same level as the current year.

International

Indian Cotton Production to Decline

July 14, 2016

The Cotton Advisory Board of India has revised its estimate for this year’s cotton supply and demand situation in India, placing production at its lowest total in five years.

International

New Leadership, Export Program for Indian Textiles

July 6, 2016

India’s textiles industry is benefitting from newly-established leadership and a program designed to increase garment exports.

International

Indian Association Wants Free Trade for Cotton

June 27, 2016

The Cotton Association of India is urging the Government of Pakistan not to support the call for an export ban on cotton by the All Pakistan Textile Mills Association.

International

Update on Indian Cotton Textile Sector

June 15, 2016

By Dr. Seshadri Ramkumar The Indian government implemented its largest ever minimum support price (MSP) scheme through Cotton Corporation of

International

Jack McCarty Named ICAC Researcher of the Year

May 31, 2016

Dr. Jack C. McCarty of Mississippi State University was named Researcher of the Year for 2016 by the International Cotton Advisory Committee.

International

New Cotton Traceability System Reaches Final Testing

May 9, 2016

An inexpensive traceability system to prove the authenticity of organic and other niche cottons could be available by the end of the year, says ICA Bremen.

Around The Gin
Product News

Cotton Board Releases 2015 Annual Report

September 27, 2016

The Cotton Board’s 2015 Annual Report is now available online.

Product News

It’s a Deal: Bayer to Acquire Monsanto

September 14, 2016

Bayer and Monsanto have announced an agreement under which Bayer will acquire Monsanto for approximately $66 billion in an all-cash transaction.

Product News

How Fiber Quality Became So Valuable

September 14, 2016

Textile expert Dean Etheridge explains the meteoric rise of fiber quality on the global market.

Product News

Cotton Cultivated Website Adds Custom Weather Feature

September 1, 2016

Cotton Cultivated – Cotton Incorporated's producer information website – now features a new weather tool tailored for cotton growers.

Product News

ChemChina/Syngenta Deal Gets U.S. Foreign Investment Approval

August 22, 2016

ChemChina and Syngenta have received a key clearance for the proposed consolidation of the companies.

Product News

Enlist Cotton Trait Earns Full Export Approval

August 10, 2016

Cotton varieties containing Dow AgroSciences’ Enlist trait now have full export approval in key countries.

Product News

Spray Equipment Offer Helps Maximize On-Target Applications

August 3, 2016

A new spray technology equipment offer can help growers participating in Roundup Ready PLUS Crop Management Solutions upgrade their sprayers to maximize on-target applications.

Product News

EPA Allows Sale and Use of Existing Belt Inventory

August 2, 2016

The U.S. EPA’s Environmental Appeals Board has upheld an earlier decision to cancel registration for Bayer's insecticide Belt, but is allowing sales of existing stocks to growers for use.

Latest News
International

Next Year’s Indian Cotton Crop to Remain Flat

August 30, 2016

The Indian cotton crop for the next season beginning in October is expected to remain at the same level as the current year.

International

Indian Government to Sell Cotton Stock

July 18, 2016

The Government of India has directed the Cotton Corporation of India to sell its entire cotton balance stock to offset the abnormal price rise.

International

Indian Spinning Association Works to Calm Current Cotton Situation

July 15, 2016

The Southern India Mills’ Association has called for calmness among spinners in India in the wake of the country’s downward cotton production estimate.

International

Indian Cotton Production to Decline

July 14, 2016

The Cotton Advisory Board of India has revised its estimate for this year’s cotton supply and demand situation in India, placing production at its lowest total in five years.

International

New Leadership, Export Program for Indian Textiles

July 6, 2016

India’s textiles industry is benefitting from newly-established leadership and a program designed to increase garment exports.

International

Indian Association Wants Free Trade for Cotton

June 27, 2016

The Cotton Association of India is urging the Government of Pakistan not to support the call for an export ban on cotton by the All Pakistan Textile Mills Association.

International

Update on Indian Cotton Textile Sector

June 15, 2016

By Dr. Seshadri Ramkumar The Indian government implemented its largest ever minimum support price (MSP) scheme through Cotton Corporation of

International

Jack McCarty Named ICAC Researcher of the Year

May 31, 2016

Dr. Jack C. McCarty of Mississippi State University was named Researcher of the Year for 2016 by the International Cotton Advisory Committee.

International

New Cotton Traceability System Reaches Final Testing

May 9, 2016

An inexpensive traceability system to prove the authenticity of organic and other niche cottons could be available by the end of the year, says ICA Bremen.

International

No Export Subsidies for Indian Cotton

April 27, 2016

According to the Government of India, the country is not entitled to export subsidies for its cotton.

International

Little Activity on New World Cotton Contract

April 4, 2016

The ICE Futures world cotton contract is off to a slow start.

International

India Taking Proactive Measures to Combat Whitefly

March 30, 2016

As planting season approaches, the government of India is taking proactive measures to combat likely white fly infestations in the country's cotton-producing Northern States.

International

Better Cotton Initiative Joins ISEAL Alliance

March 24, 2016

The Better Cotton Initiative has been accepted as a full member of the ISEAL Alliance by achieving full compliance with the organization’s standard-setting code.

International

India to Produce Less Cotton This Season

February 29, 2016

India is expected to produce about 3 million bales less cotton for the season ending in September 2016, compared to a year ago.

International

China Losing Top Cotton Importer Status

February 3, 2016

China has been surpassed by Vietnam as the world’s top cotton importer.