World Cotton Stocks to Decrease in 2007/08

In 2007/08, world cotton production is forecast to remain stable at 25.3 million tons whereas world cotton consumption is expected to continue to increase to 26.5 million tons (+2%). As a result, world cotton stocks are expected to decline by 7% to 10.7 million tons by the end of 2007/08. World cotton trade is projected up by 4% to 9.1 million tons in 2007/08, driven by predicted higher Chinese imports.

2006/07 world cotton production is estimated at 25.3 million tons, 3% higher than last season thanks principally to higher yields. World cotton consumption is estimated at 25.9 million tons in 2006/07, up 4%. World cotton imports are forecast to decline by 8% in 2006/07 to 8.8 million tons, the second highest on record.

The main reason for this projected decline is the expected drop in Chinese imports in 2006/07. 2006/07 exports are projected to decline in most large exporting countries including the United States, Uzbekistan, Brazil, and Australia. In contrast, 2006/07 Indian exports, boosted by a bumper crop, are expected to reach a record.

* Season-average Cotlook A Index (U.S. cents per pound). The price projections for 2006/07 and 2007/08 are obtained based on the year-to-year price differentials projected by the ICAC Price Model (based on annual variations in net China (Mainland) trade and world-less-China (Mainland) stocks-to-use ratio).