Washington, DC
March 18, 2008
Source:
International Cotton Advisory
Committee
The Cotlook A Index averaged 70
cents per pound during the first seven months of 2007/08, 11
cents higher than during the same period last season. The
average 2007/08 Cotlook A Index as of the end of February 2008
was the highest since 1997/98 and equals the thirty year average
recorded between
1973/74 and 2002/03.
As a result of the gap between world production and consumption,
world cotton ending stocks are projected to decline during
2007/08 by 1.1 million tons
(9%) to 11.5 million tons. World mill use is projected to exceed
production again in 2008/09, and a further reduction in world
ending stocks could take place to an estimated 10.7 million tons
(-7%).
The fundamentals of cotton supply and use alone would suggest a
season-average Cotlook A Index of less than 70 cents per pound
in 2007/08.
However, based on trends in prices during the first seven months
of 2007/08, it is obvious that prices will be higher. During
February 2008, the Cotlook A index rose from 72 cents per pound
to 81 cents per pound, the highest level since August 1997. The
price increase during February was not caused by changes in
estimates of fundamental factors of cotton supply and use during
the past month. Increases in prices of competing crops and the
increasing role of commodity investment funds may be affecting
cotton prices in ways that are not reflected in fundamental
measures of cotton supply and use.
Considering trends in the Cotlook A Index during the first seven
month of
2007/08 and assuming that the Cotlook A Index fluctuates between
76 and 83 cents per pound during the rest of the season, the
Secretariat projects that the Cotlook A Index will average 74
cents per pound during 2007/08. Given that world ending stocks
are expected to fall further during 2008/09, the upward trend in
cotton prices is expected to continue.
WORLD COTTON SUPPLY AND DISTRIBUTION
|
. |
2006/07 |
2007/08 |
2008/09 |
2006/07 |
2007/08 |
2008/09 |
|
. |
Million Tons |
Million Bales |
|
Production |
26.74 |
25.99 |
26.6 |
122.8 |
119.4 |
122.1 |
|
Consumption |
26.65 |
27.14 |
27.5 |
122.4 |
124.6 |
126 |
|
Exports |
8.12 |
8.8 |
8.74 |
37.3 |
40.2 |
40.1 |
|
Ending Stocks |
12.70 |
11.6 |
10.70 |
58.3 |
53.1 |
48.9 |
|
Stock adjustment |
0.0 |
0.2 |
-0.25 |
0.0 |
0.6 |
-1.4 |
|
Cotlook A Index* |
59.15 |
74* |
. |
59.15 |
74* |
. |
|
* Season-average Cotlook A Index
(U.S. cents per pound).
* The price projection for 2007/08 represents the Secretariat
judgment, based on the average price for the first seven months
and projected price variations during the rest of the season.
PDF version:
http://www.icac.org/cotton_info/publications/press/2008/pr_march_08.pdf
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 |
|
