The International Cotton Advisory Committee nudged higher its forecast for cotton prices even as Bcom cautioned of a decline in values ahead – thanks to world stocks sufficient to manufacture 127bn T-shirts.

The ICAC raised by 1 cent to 71 cents a pound its forecast for the average 2015-16 cotton price, as measured by the Cotlook A index of physical values.

The upgrade took the figure in line with the 71 cents a pound at which the Cotlook A averaged last season, although this was the weakest season-average price since the 61.2 cent a pound recorded for 2008-09.

The ICAC revision came as it trimmed its forecast for world stocks at the close of 2015-16 to 20.59m tonnes, a drop of 1.44m tonnes year on year.

The change trims the implied stocks-to-use ratio - a key pricing metric - to 84.6% for this year from 91.0% in 2014-15.

'Most destructive commodity crash'

The comments follow a calendar 2015 in which New York-traded cotton was the only commodity covered by Bcom, the Bloomberg Commodity Index, to post a positive return, of 3.0%.

ICAC cotton supply and demand forecast and (year on year change)

Production: 23.11m tonnes, (-5.2%)

Consumption: 24.37m tonnes, (-5.2%)

Exports: 7.35m tonnes, (-4.7%)

Ending stocks: 20.65m tonnes, (-5.8%)

This for a year the index termed "the most destructive commodity crash in a generation", bringing average losses for commodities of 24.7%.

(New York-traded raw sugar futures did post gains on a spot contract basis, while the index does not include the likes of cocoa and palm oil, which also made headway over 2015.)

'Gains may not last much longer'

Nonetheless, Bcom on Tuesday raised doubts over whether cotton's outperformance could last, flagging the extent of inventories, which the US Department sees even higher than the ICAC, at 22.7m tonnes.

Season-average Cotlook A prices

2015-16: 71 cents a pound (forecast)

2014-15: 71 cents a pound

2013-14: 91 cents a pound

2012-13: 88 cents a pound

2011-12: 100 cents a pound

2010-11: 164 cents a pound

"There's enough cotton sitting in global warehouses to make more than 127bn T-shirts, or 17 for each person on the planet," Bcom said, quoting the USDA figure.

This "may create downward pressure on prices".

While threats to the US crop, "hampered by heavy rains, helped make the fibre 2015's best-performing commodity, the gains may not last much longer as demand slows," Bcom said, highlighting forecasts for a further tumble in imports by China, following a subsidy shake-up.

'Increased pest pressure'

The ICAC restated a forecast that Chinese imports will fall to 1.2m tonnes in 2015-16, down 34% year on year and a fraction of the 5.34m tonnes bought in at the 2011-12 high.

Bcom sector performances over 1 year, 3 years and (5 years)

Softs: -9.9%, -32.6%, (-55.0%)

Precious metals: -11.5%, -42.8%, (-36.5%)

Livestock: -18.8%, -12.7%, (-17.7%)

Grains: -19.4%, -39.3%, (-38.6%)

Industrial metals: -26.9%, -41.2%, (-55.1%)

Energy: -38.9%, -61.0%, (-70.3%)

Petroleum: -39.4%, -63.9%, (-63.1%)

It also repeated an estimate of Chinese cotton production of 5.3m tonnes in, a drop of 19% year on year, also reflecting the subsidy changes.

The harvest in India, which last season overtook China to become the biggest cotton producer, was downgraded by 100,000 tonnes to 6.2m tonnes, with Pakistani output downgraded by 200,000 tonnes to 1.7m tonnes.

"After achieving a record of 812 kilogrammes per hectare last year, the average yield in Pakistan may decrease by 22% to 637 kilogrammes per hectare," the committee said.

The intergovernmental group cited "adverse weather, increased pest pressure from whitefly and pink bollworm, and the high cost of inputs discouraging farmers from better crop management".