World cotton production is expected to reach a record of 23.5 million tons in 2004/05, 2.9 million tons (14%) more than in 2003/04. World cotton mill use is expected to increase by 600,000 tons (2.8%) and reach a record of 21.9 million tons. With production exceeding consumption, world ending stocks are forecast to climb from a 9-year low in 2003/04 to 9.3 million tons by July 31, 2005. China (Mainland)'s net imports are projected down 350,000 tons from a record of 1.9 million tons last season. As a result, the average Cotlook A Index is forecast to drop from 68 cents per pound in 2003/04 to 53 cents per pound in 2004/05.

IMF projections released on September 29 suggest that the world GDP will grow by 5% this year and by 4.3% in 2005, up from 3.9% in 2003. Improved economic performance will have a positive impact on the world textile industry. Cotton consumption will also be stimulated by lower cotton prices. Average international cotton prices in September 2004 were 11% lower than a year ago. In contrast, polyester prices are rising and were about 10% higher in September than last year at the same date. This is likely to slow the decline in cotton's market share. Nevertheless, end-use consumption of non-cotton fiber is likely to continue to expand at higher rates than cotton
consumption, and the market share of cotton is projected to fall below 39% in 2005.

The shortfall between production and consumption in China (Mainland) is expected to drop from 2.2 million tons in 2003/04 to 1.3 million tons this season. However, depleted stocks need to be replenished. As a result, Chinese imports are forecast to decline only from over 1.9 million tons last season to 1.6 million tons in 2004/05. World exports are expected to decrease from a record of 7.4 million tons to 6.7 million tons.


WORLD COTTON SUPPLY AND DISTRIBUTION

. 2003/04 2004/05 2005/06 2003/04 2004/05 2005/06 . Million Tons Million Bales Production 20.618 23.51 22.42 94.70 108.0 103.0 Consumption 21.332 21.90 22.32 97.98 100.6 102.05 Exports 7.371 6.68 7.01 33.86 30.7 32.2 Ending Stocks 7.704 9.31 9.42 35.38 42.8 43.3 Cotlook A Index 68.3 53* 54* 68.3 53* 54*

* 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.