Global : Cotton prices maintain upward trend
Source: Australian Wool Innovation Limited Date: 2008-03-13
World cotton prices maintained their upward trend in the first 7 months of the 2007/08 season. The rise in cotton prices has not improved the wool to cotton ratio which in January 2008 climbed to 6.0 compared with 5.9 in December 2007.
The increase was due to exceptionally strong January wool prices, as expressed in US$. In January, the 21 micron indicator reached the highest level since the collapse of the Reserve Price Scheme in February 1991.
The rising trend in cotton prices over the last 3 years is linked to diminishing production and a steady demand for cotton on the international markets.
On the supply side, Cotlook and the United States Department of Agriculture (USDA) predict a moderate drop in world cotton production during the 2007/08 season compared with 12 months ago.
Out of the 5 top cotton producing countries, only India, the second largest producer, is expected to increase the annual production in the 2007/08 season.
The biggest cotton producing country, China, is forecast to drop annual cotton production moderately, while the annual production of cotton in the USA (third on the list) and in Pakistan is predicted to fall more dramatically year-on-year and Brazil is forecast to maintain production at the same level.
It remains to be seen if the anticipated easing of the world demand for cotton may halt the rising trend of cotton prices which has been evident since January 2005.
