Cotton prices sharply down in September
Source: International Cotton Advisory Committee Date: 2008-10-06
Cotton prices fell sharply in September, affected by the crisis in the U.S. financial system. The Cotlook A Index dropped from 78 cents per pound on September 1 to 68 cents per pound on September 30.
World cotton production is expected to decline by 6% to 24.7 million tons in 2008/09, due mainly to competition from alternative crops. The production drop is driven by the United States, but the 2008/09 crops are also expected to be smaller in Turkey, Brazil and Egypt. Cotton production is projected to increase in Australia and Pakistan.
World cotton mill use is expected to decline by 1% in 2008/09 to 26.0 million tons, due to slower global economic growth and higher prices of cotton relative to polyester. World imports are forecast almost stable, at 8.4 million tons. In spite of lower U.S. production, large accumulated stocks could maintain U.S. exports around 3 million tons.
World cotton stocks are forecast to decrease by 11% to 10.9 million tons in 2008/09. The largest decline in stocks is expected to take place in the United States.
The ICAC Price Model 2007 forecasts the 2008/09 season-average Cotlook A Index at 79 cents per pound, 6 cents higher than the 2007/08 average.
