Singapore. Global cotton ending stocks may rise 9% to 14.5 million metric tons next crop year, with the projected accumulation for a second consecutive season likely to weigh on international cotton prices in 2012-13, the International Cotton Advisory Committee said.
In the 2011-12 crop year ending July 31, stocks are expected to surge 43% to 13.3 million tons, the ICAC said late Friday, adding that about three-fourths of the projected increase in global stocks is taking place in China, mostly within its national reserve.
The Chinese government already announced a slightly higher minimum support price for 2012-13 and is expected to buy part of the new cotton crop, suggesting that the size of the Chinese national cotton reserve may increase further in 2012-13, it said.
“By the end of July 2013, global stocks would represent 61% of global consumption, the highest stocks-to-use ratio reached since 1998-99,” the committee said.
However, it forecasts 2012-13 world cotton production to decline by 7% to 25.1 million tons due to the plunge in cotton prices this crop year. In 2012-13, global cotton mill use is projected to increase by 3% to 23.9 million tons, driven by improving economic growth and lower cotton prices, it said.
Benchmark cotton futures on New York’s InterContinental Exchange have plunged by more than 25% since Jan. 3. ICE July cotton settled at 68.59 cents a pound Friday.