Global Cotton Consumption Down in 2010/11, according to ICAC
World cotton consumption will drop by three percent, to 24.5 million tons, in 2010/11 despite recovering global economic growth.
July 8, 2011
According to the International Cotton Advisory Committee, world cotton consumption will drop by three percent, to 24.5 million tons, in 2010/11 despite recovering global economic growth.
Demand from spinning mills was strong in the first half of this season, but is now much weaker. Spinners, faced with high prices of cotton and difficulties to access credit on the one side, and declining prices of cotton yarn on the other side, have reduced their activity. Stocks of cotton yarn have accumulated at many mills.
Prices of chemical fibers have remained much lower than cotton prices, encouraging an increased switch to chemical fibers at the spinning level. Cotton mill use is expected to rise by 3% to 25.2 million tons in 2011/12, driven by projected global economic growth and boosted by increased production, but moderated by relatively high cotton prices and competition from chemical fibers.
World cotton production is expected to increase by 11% to 27.4 million tons in 2011/12, driven by the high cotton prices received by farmers in 2010/11. Production will grow in most large producing countries, with the exception of the United States.
Global cotton trade is projected up by 5% to 8.2 million tons in 2011/12, fueled by larger production and consumption. Imports by China are expected to increase by 24% to 3.3 million tons, assuming a rebound in mill use and a rebuilding of stocks from historically low levels. The increase in exports will be driven by Brazil and Australia, while U.S. exports could decrease due to reduced exportable supplies.
The Cotlook A Index averaged $1.64 in 2010/11, 112% higher than in the previous season. The Secretariat believes that the season-average Cotlook A Index will decline significantly in 2011/12, although it will probably remain above the 10-year average of $0.60 per pound (2000/01 to 2009/10).