WASHINGTON (Commodity Online): World cotton production is projected at 22.3 million tons in 2009/10, 5% lower than in 2008/09. This decline in global production is driven by China, where the cotton crop is expected to fall to 6.75 million tons, 16% less than last season. On the other side, cotton output in India is projected to increase to a record of 5.3 million tons, 8% more than last season, according to International Cotton Advisory Committeel (ICAC)
Cotton production in the southern hemisphere is expected to rise by 4% to 2.1 million tons in 2009/10, driven by Australia and Argentina. Production in Brazil could decline slightly.
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World cotton mill use is expected to recover by 2% to 23.6 million tons in 2009/10, driven by the global economic rebound. Asia is expected to be the main engine of growth in cotton spinning this season, with a projected increase in cotton consumption of 620,000 tons to 18.3 million tons, accounting for 77% of global cotton mill use.
World cotton imports are forecast to rise by 8% to 7.0 million tons in 2009/10. The Secretariat expects Chinese imports to increase by 18% to 1.8 million tons, but their eventual size will depend on government decisions regarding import quotas and reserve management. Exports from India could rebound to 1.4 million tons, driven by a large exportable surplus. Exports from Uzbekistan and Australia are also expected to expand, whereas US exports could decrease by 18% to 2.4 million tons.
Based on an expected lower stocks-to-mill use ratio in the World-less-China in 2009/10, the ICAC Price Model forecasts a season-average Cotlook A Index of 67 U.S. cents/lb in 2009/10 (the 95% confidence interval is between 59 and 76 cents/lb). This would represent a 9% increase from the 2008/09 average.