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Record prices rationing demand, but crops fall short of expectations

29 Nov 10 , Cotlook

In face of record prices and a prospective shortage in supply through the remainder of this season (August/July), mills in many countries have tended to substitute cheaper man-made fibres for cotton, or reduce throughput altogether. The decline in our global consumption estimate during the past month of just over half a million tonnes may be considered slight in the context of the unprecedented rise in raw cotton replacement costs, and further downward adjustments cannot be ruled out. We are now predicting consumption will be merely one percent higher than last season, against 3.2 percent three months ago.

As the Northern Hemisphere harvests draw to a close, the results have pointed to smaller output than was previously expected, with adverse weather through the cultivation cycle taking a toll. Those reductions have been partially offset by increases in the Southern Hemisphere, where reports indicate that high prices are influencing farmers to plant record crops.

Our revised forecasts still suggest global stocks will fall this season, but by a lesser margin than was the case a month ago.

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Full details of Cotlook’s figures for this season and next are published in this week’s edition of the weekly Cotton Outlook magazine. For details of how to subscribe please visit www.cotlook.com, or email
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