The world cotton supply (beginning stocks plus production) is rising sharply to an estimated 31.8 million tons in 2004/05, up 2.7 million tons (9%) from last season. This is the highest world supply ever, 600,000 tons above the previous record in 2001/02. In volume and in percentage, this will be the largest year-to-year increase in world supply since 1984/85. Beginning stocks shrank from 10.5 million tons in 2002/03 to an estimated 7.7 million tons on August 1, 2004, the lowest since 1995/96. However, rising prices in 2003, good weather and the use of new technologies are leading to world production soaring from 20.6 million tons in 2003/04 to an estimated 24.1 million tons in 2004/05, more than offseting the reduction in beginning stocks. World production in 2004/05 is expected to increase 3.5 million tons from last season (17%), and exceed the previous record of world production set in 2001/02 by 2.6 million tons. Increases in production are expected in almost all producing countries, which is quite exceptional. Records or near-records are forecast in the top 5 producing countries: China (Mainland), the USA, India, Pakistan and Brazil.

World cotton consumption in 2004/05 is being stimulated by lower prices, combined with improving world economic growth despite higher oil prices. Cotton is expected to remain competitive with polyester. As a result, world mill use is forecast to grow by about 3% in 2004/05 to reach a record of 22 million tons, up 600,000 tons. World cotton exports are expected to decline from a record of 7.3 million tons last season to 6.7 million tons in 2004/05. As supply is expected to exceed consumption in 2004/05, world ending stocks are forecast to inflate by 2.1 million tons to 9.8 million tons by July 31, 2005.

Supply and demand estimates suggest that the Cotlook A Index will average 48 cents per pound this season, 20 cents, or 30%, lower than last season. This would be the sharpest drop in absolute terms since 1985/86, and since 1974/75 in relative terms.


WORLD COTTON SUPPLY AND DISTRIBUTION

. 2003/04 2004/05 2005/06 2003/04 2004/05 2005/06 . Million Tons Million Bales Production 20.610 24.14 22.69 94.70 110.9 104.2 Consumption 21.342 21.97 22.41 98.02 100.9 102.9 Exports 7.277 6.58 6.92 33.62 30.2 31.8 Ending Stocks 7.671 9.84 10.12 35.24 45.2 46.5 Cotlook A Index 68.3 48* 48* 68.3 48* 48*

* US cents per pound. Statistical estimates are based on current estimates of supply and use; 95% confidence intervals extend 12 cents per pound above and below each point estimate.

The International Cotton Advisory Committee is an association of 41 governments of cotton producing and consuming countries. The Secretariat of the Committee publishes information related to world  cotton production, supply, demand and prices, and provides technical information on cotton production technology. Detailed statistics are found bimonthly in COTTON: Review of the World Situation, $160 per year. A monthly outlook by fax is also available for $300 per year or on the Internet for $250 per year. Access to the weekly estimates of world cotton supply and use by the Secretariat is also available on the Internet for $500 per year.