Cotton output to fall in current season

Cotton output to fall in current season
February 13, 2010 (South Africa)

According to The International Cotton Advisory Committee (ICAC), world  
cotton production for 2009/10 is projected at 22.2 million tons, a  
decrease of 5% over the previous season mainly due to lower yields. As  
a result world cotton stocks are expected to decline by 14% to 10.5  
million tons by July 2010, which would be the lowest level in 6 years.

Based on the above and the expectation that world cotton use will grow  
by 2.8% in 2009/10 to 23.9 million tons, the ICAC’s price model is  
forecasting an 18% increase in the average Cotlook A index (an  
indicator of world cotton prices) for 2009/10. The latest A index  
estimate for 2009/10 of 72 US c/lb is 2 US c/lb up from last month’s  
forecast.

The higher prices paid for cotton in 2009/10, combined with the recent  
decline in grain prices will however encourage farmers to increase  
cotton plantings in 2010/11 according to the ICAC. World cotton area  
for 2010/11 is expected to increase by about 5% and assuming an  
average yield, cotton production is forecast by the ICAC to rebound to  
24.1 million tons, an increase of about 9% over 2009/10.

The ICAC also expects world cotton consumption to continue to recover,  
growing by 2.5% to 24.5 million tons in 2010/11. Most of the growth  
however will be in Asia, South America and Turkey.

Although the ICAC forecasts world cotton trade to increase only  
slightly in 2010/11, Chinese imports is expected to increase by about  
15% to 2.1 million tons, driven by increased mill use. Exports from  
India are expected to remain stable in 2010/11 but USA exports are  
forecast to increase by 10% mainly driven by increased production.

Local outlook:
As far as the local outlook is concerned, the 1st estimate for the  
2009/10 production year indicates a total crop of 41 261 lint bales,  
8% down from the previous season and the smallest crop since the early  
sixties.

About 37,841 lint bales are estimated to be produced from RSA produced  
seed cotton, 10% down from the previous season. The balance of 3,420  
lint bales relates to Swaziland produced cotton ginned by the  
Swaziland gin.

Fibre2fashion News Desk - India
Source:

http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=82364