Global Cotton Mill Use Recovering Faster than Expected
World cotton mill use fell by 12% to 23.3 million tons in 2008/09, driven by
the global economic and financial crisis that resulted in a sharp drop in
consumption of textile products. The Secretariat's projection for 2009/10 has
become more optimistic over the last twelve months, as the global economic
outlook has improved. 2009/10 global cotton mill use is now forecast at 23.9
million tons, up 2.8% from last season. World cotton mill use is expected to
continue to recover in 2010/11, growing by 2.5% to 24.5 million tons, driven
by continued progress in global economic growth.
Higher prices paid for 2009/10 cotton, combined with the recent decline in
prices of grains and oilseeds and relatively stable production costs, should
encourage farmers to increase cotton plantings in 2010/11. World cotton area
is forecast up by 5% to 32.0 million hectares. Assuming an average yield
slightly higher than in 2009/10, world cotton production is expected to
rebound to 24.1 million tons. A small decline in cotton ending stocks is
expected in 2010/11.
World cotton trade is expected to increase slightly in 2010/11 to 7.4 million
tons. Chinese imports are forecast to grow by 15% to 2.1 million tons, driven
by increasing mill use. Exports from the United States are projected up by
10% to 2.6 million tons next season, driven by increased production, whereas
Indian exports could remain stable. For other major exporters, only small
changes in shipments are expected at this stage.
WORLD COTTON SUPPLY AND DISTRIBUTION
2008/09 2009/10 2010/11 2008/09 2009/10 2010/11
Million Tons Million Bales
Production 23.41 22.2 24.1 107.5 102 111
Consumption 23.28 23.9 24.5 106.9 110 113
Exports 6.56 7.1 7.4 30.1 33 34
Ending Stocks 12.28 10.5 10.1 56.4 48 46
Cotlook A Index* 61.20 72** 61.20 72**
* Season-average Cotlook A Index (U.S. cents per pound).
** The price projection for 2009/10 is based on the ending
stocks/consumption ratio in the world-less-China in 2007/08 (estimate), in
2008/09 (estimate) and in 2009/10 (projection), on the ratio of Chinese net
imports to world imports in 2008/09 (estimate) and 2009/10 (projection), and
on the average price for the first six months of 2009/10. 95% confidence
interval: 66 to 78 cents per pound.