Global cotton imports are expected to decrease by 12% to 7.3 million tons in 2008/09, resulting from a projected 6% decline in global cotton mill use, to 24.9 million tons. Lower expected global economic growth in 2009, projected declines in developed economies’ income in 2009, tightening credit availability for spinning mills, and uncertainty regarding the consequences of the global financial crisis, are severely affecting cotton consumption worldwide.
The projected decline in world cotton trade is driven by an expected 24% drop in imports by China (Mainland) to 1.9 million tons. Imports by the rest of the world are also expected to decline by 7% to 5.4 million tons.
World cotton production is expected to decline by 6% in 2008/09, to 24.6 million tons, driven by a decline in cotton area caused by increased competition from grains and oilseeds and unfavorable fluctuations in the exchange rates of many producing countries during 2007/08. In particular, production is expected to fall by 30% in the United States to 2.9 million tons. Production is also projected down significantly in Turkey and Brazil, but could increase in India, Pakistan and Australia.
The ICAC Price Model 2007 forecasts the 2008/09 season-average Cotlook A Index at 69 cents per pound. However, the Secretariat believes that the 2008/09 season-average Cotlook A Index may actually be in the lower half of the 95% confidence interval, between 62 and 69 cents per pound.
Source: International Cotton Advisory Committee, press release, 2008-12-01.