Commodity Online
WASHINGTON: The International Cotton Advisory Committee (ICAC) has said that world cotton production could decline slightly to 26 million tonnes in 2008-09 thereby causing prices to increase.

Declines in production are expected from United States, Brazil and Turkey due to competition from grains and soybeans.

ICAC forecasts a season-average Cotlook A Index of 79 cents per pound in 2008/09, 6 cents higher than the expected 2007/08 average. This projected price increase is due mainly to an expected decline in the stocks-to-mill use ratio in the World-less-China (Mainland).

The reduction in acreage in US, Brazil and Turkey could offset increases projected in Asia, West Africa and Australia.

Global cotton mill use is expected to remain stable at 26.7 million tons in 2008/09 due to slower world economic growth and higher prices of cotton relative to polyester.

World consumption is expected to exceed production in 2008/09. As a result, world ending stocks
are forecast down by 6% to 11.3 million tons.

World imports are expected to increase by 5% to 8.8 million tons in 2008/09 due to projected higher imports by China (Mainland). Imports by the rest of the world are projected down for the second consecutive season.

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