The International Cotton Advisory Committee has predicted the average global cotton price for 2018-19 will be 86 cents per pound, lower than its earlier projection of 89 cents, on a likely decline in consumption. The current Cotlook Index A is hovering around 80 cents per pound.
“With a confidence interval of 95 per cent , the Secretariat of the International Cotton Advisory Committee (ICAC) has set its 2018/19 price forecast for cotton fibre at 86.45 cents per pound, down from 89 cents in December 2018,” the apex cotton body said in a statement.
The forecast has a price range from a low of 75.60 cents to a high of 100.21 cents, of which the midpoint price level is 86.45 cents. This forecast is based on the assumptions of marginal reduction in world cotton consumption at 26.7 million tonnes for the period as against 26.81 mt reported in the same period last year.
World cotton ending stocks, however, are projected at 18.2 mt, marginally down from 18.76 mt .
Earlier, in its 77th Plenary Meeting held last month, ICAC had estimated world cotton production for 2018/19 season at 26.12 mt, down from 26.75 mt in the previous season, due to a reduction in planting area, water availability, and limited improvements in yields.
However, Consumption growth has slowed during the period but at 26.8 mt is currently projected to exceed production, the ICAC statement said. Meanwhile, ICAC has projected future demand for the fibre at 121 mt by 2025, implying 25.5 mt of additional demand between 2017 and 2025, which represents an important opportunity for the cotton sector.
On the cotton yields in key growing countries, ICAC noted that if cotton yields in India and sub-Saharan Africa were as high as the world average, cotton production would increase by 5.3 mt. India’s apex cotton trade body, Cotton Association of India (CAI), had expressed the need to take measures to scale up cotton yields.
At CAI's 96th Annual General Meeting (AGM), held last week in Mumbai, President, Atul Ganatra expressed concerns over lower cotton productivity in India at 500 kg at present as compared to the world average of 770 kg.
“Productivity of cotton in India ... has not been increasing for the last few years,” said Ganatra, expressing concerns of India facing a threat of becoming a net importer of cotton if the supply situation is not improved soon.