MUMBAI (Commodity Online): Global cotton production could drop to 24.9 million tons in 2012/13 due to the lower prices received by farmers in the current season, improving attractiveness of grains and soybeans, and rising agricultural production costs, according to International Cotton Advisory Board (ICAC).
At present, global cotton production is rising by an estimated 7% in 2011/12, to 26.8 million tons.
Due to high production and low demand due to the economic crisis, the global cotton prices had droped drastically from March 2011.
However international cotton prices have steadied at around $1 per pound in January 2012 after decreasing for almost ten months. The main reasons behind this price stabilization seem to be the support provided by the Chinese government by the significant purchases from both the domestic and the foreign markets, and an improvement in demand for cotton.
On Inter-Continental Exchange (ICE), the cotton for March delivery traded at 93.80cents per lb on Thursday at 15:45 IST.
