Cotlook cuts world cotton-use forecast on poor economy
Source: CTEI Date: 2011-11-21
Influential industry publication Cotlook on Thursday cut its forecast for world 2011/12 cotton consumption and raised its cotton-surplus projection, as economic fears sap demand for the fiber.
"The deteriorating economic outlook has become the dominant influence on the behaviour of buyers throughout the cotton textile value chain," the monthly report for November by Cotlook said.
Cotlook cut its outlook for world cotton consumption in 2011/12 by a further 400,000 tonnes and projected global ending stocks at 3.556 million tonnes, up nearly 20 percent from the previous month's estimate of 3.003 million tonnes.
It forecast world cotton consumption at 23.523 million tonnes, against an estimate last month of 23.923 million tonnes.
The consumption forecast is now virtually at the same level as the estimate for the previous season, it said.
Cotton prices on the ICE Futures US exchange reached a record around $2.27 a lb in March 2011 before falling to below the psychological $1 mark recently.
Hopes for a recovery in fiber demand "have steadily faded" in recent months, Cotlook said.
China books one million ton cotton overseas to fill reserves BEIJING: China has booked nearly 1 million tonnes of cotton from overseas to refill state reserves, an industry website said on Friday, much higher than the market had expected.
China booked the imported cotton while global prices were relatively low, said a statement published on www.chinacotton.org, which is jointly owned by three shareholders including the country's national cotton exchange.
Cotton prices on the ICE Futures US exchange reached a record around $2.27 a lb in March 2011 before falling to below the psychologically important $1 mark recently.
Industry participants said the country imported 800,000-900,000 tonnes of cotton since October to fill low reserves and is unlikely to make more aggressive imports in the 2011/2012 crop year started in September."Most of the country's stock refill job with imported cotton has been fulfilled, and imports in the future is unlikely to be big," said Liu Shijun, an analyst with Jingyi Futures.
Before the big government purchase was widely known to the market, people had expected the country to import another 700,000-800,000 tonnes of the crop to fill stocks.
Analysts said China may need to build as much as 3 million tonnes of state reserves in 2011/2012 to adequately manage the market at times when prices surge.
