ICAC&Nbsp; July Report: Tight Global Cotton Supply

2010/7/9 9:56:00 40

International Cotton Advisory Committee

ICAC (July 1st) released the latest report: in June, due to a sharp reduction in the quotas for cotton in 09/10, the Cotlook A index ceased since June 22nd.

Cotlook A index 09/10 annual average of 78 cents / pound, 28% higher than 08/09, also the highest since 96/97.

The 2010/11 Cotlook A new flower index in May 16th was the only index that is still being released.

As global cotton production continues to decline and textile cotton recovers, the 09/10 end of the year is expected to be 9 million 600 thousand tonnes, down 21% from the same period last year, the lowest level since 03/04.

Global

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Consumption fell from 52% in 08/09 to 39% in 09/10, the lowest since 1993/94.

Before the new flower picking in the northern hemisphere in August, global cotton supply remained tight.

In 2010/11, global cotton production is expected to rebound by 14% to 25 million tons.

The increase is due to the expansion of cotton planting area, which is the response of cotton growers to the increase of cotton prices in 09/10 and the decline of grain and oilseed crops prices.

Under the continuous improvement of global economic growth, but also limited by the high cotton price and the re reserve effect slowing down, the global textile cotton consumption is expected to continue to grow by 2%, to 24 million 900 thousand tons.

Due to the balance of cotton production and consumption in 2010/11, the end of the world inventory will remain unchanged at 9 million 600 thousand tons.

consumption

The ratio will remain at 39%.

The ICAC price model predicts that the Cotlook A index will average 87 cents per pound in 2010/11, with a probability of 95% between 73-103 cents / pound.

That means an increase of 12% over the 2009/10 estimate.

However, we must pay attention to the uncertainty existing in the bulk commodity market.