International Cotton Advisory Committee (ICAC) forecasts uncertain Cotton prices in 2017-18 despite a projected production increase of 8% worldwide and a rise in consumption by 2%. World Cotton trade is projected to decline by 1% to 7.8 million tonnes.
The A Index (a proxy for the world price of Cotton) in 2017-18 will range between 54 cts/lb (US cents per pound) and 87 cts/lb with a midpoint of 69 cts/lb, which is 13 cts/lb lower than the value in 2016-17. This follows the large increase of 12 cts/lb from 2015/16 to 2016/17, which suggests that such a drop is not unreasonable, the ICAC said.
Bangladesh, Vietnam and China are expected to remain the world’s three largest importers. Bangladesh’s imports are projected to increase by 7% to 1.5 million tonnes, Vietnam’s by 5% to 1.3 million tonnes, and China by 4% to 1.1 million tonnes.
Consumption in Bangladesh is projected to rise by 5% to 1.5 million tonnes due to strong domestic and international demand, and Turkey’s mill use is expected to remain stable at 1.5 million tonnes. Australia’s Cotton exports are projected to increase by 8% to 760,000 tonnes.
World ending stocks are projected to decrease by 1% to 18.8 million tonnes in 2017-18, with increases outside of China offset by decreases in China’s stocks. China’s stocks are expected to decline by 16% to 8.9 million tonnes. Ending stocks outside of China are forecast to grow by 19% to 9.8 million tons, according to the ICAC.