WASHINGTON (Commodity Online): World cotton area is expected to continue to decline to 30.4 million hectares in 2009/10, the lowest area since 2002/03, according to a forecast by International Cotton Advisory Committee (ICAC)

World cotton production is expected to be stable at 23.6 million tons in 2009/10. Expected production increases in India, the United States, Pakistan and Australia are expected to be offset by declines in China (Mainland), Brazil, Uzbekistan, Turkey, Greece, Turkmenistan and Mexico.

World cotton mill use is expected to recover slightly to 23.5 million tons in 2009/10. However, this modest upturn is dependent upon an improvement in world economic growth.

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World cotton trade is forecast 7% higher at 6.8 million tons, driven by an increase in imports by major consuming countries, including China (Mainland). Indian exports are expected to rebound strongly in 2009/10, to 1.4 million tons.

The season-average Cotlook A Index is expected to be unchanged. Based on an expected stable stocks-to-mill use ratio in the World-less-China (Mainland) in 2009/10, the ICAC Price Model 2007 forecasts a season-average Cotlook A Index of 60 U.S. cents/lb in 2009/10 (the 95% confidence interval is between 51 and 71 cents/lb). This would represent a 2% decline from the 2008/09 average.

Cotlook A Index* 72.90 61 60** 72.90 61 60**
* Season-average Cotlook A Index (U.S. cents per pound).

The price projection for 2009/10 is based on the ending stocks/consumption ratio in the world-less-China (Mainland) in 2007/08 (estimate), in 2008/09 (estimate), and in 2009/10 (projection), and on the ratio of Chinese net imports to world imports in 2008/09 (estimate) and 2009/10 (projection). 95% confidence interval: 51 to 71 cents per pound.

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