ICAC Issues World Cotton Supply Update

As a result of a continued decline in world production and a concurrent rebound in global mill use, 2009-10 global cotton ending stocks are projected at 9.6 million tons, down by 21 percent from the previous season and the smallest level of stocks since 2003-04. The global stocks-to-use ratio is also falling, from 52 percent in 2008-09 to 39 percent in 2009-10, the lowest ratio since 1993-94.

Supplies of cotton will remain tight until the start of the harvest of the new crop in the northern hemisphere in August. World cotton production is expected to rebound by 14 percent in 2010-11, to 25 million tons. The forecast larger crop is explained mainly by an expansion in cotton plantings as farmers are reacting to the rise in cotton prices during 2009-10 and the declining prices of grains and oilseeds. World cotton mill use is projected to continue to recover in 2010-11, growing by 2 percent to 24.9 million tons, pushed by continued improvement in global economic growth but limited by high cotton prices and a slowing “restocking effect.” As global cotton production and mill use are forecast to almost balance in 2010-11, world ending stocks are expected to remain essentially unchanged at 9.6 million tons. The global stocks-to-use ratio is forecast to remain at 39 percent in 2010-11.

Source: International Cotton Advisory Committee Press Release