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China to consume almost a third of global cotton supply

Washington — After jumping up by more than a third last year, to 56 cents a pound, cotton prices are forecast to rise again next year, though at a much slower pace, edging up an estimated 5.3 percent to 60 cents a pound, the International Cotton Advisory Council (ICAC) reported.

In a monthly update of the world cotton outlook, the international trade group said prices should then level off at about 59 cents a pound for the 2004/05 cotton year as production begins to outstrip demand.

Higher prices, said the cotton cartel, have led to an increase in worldwide production, from 19.2 million last year to an estimated 20.5 million tons this year, a gain of almost 7 percent. But consumption — mill use — is forecast to grow at a much slower pace of just 1.0 percent, to 21.2 million tons from 21.0 million last year, helping to put a cap on cotton prices next year.

China continues to be a major cotton consumer and producer of cotton textiles, said the ICAC. Total yarn output in China reached 8.9 million tons in 2002/03, up 1.4 million tons, or 19 percent, from the previous season. Cotton cloth production in China increased by nine percent, while exports were up 34 percent on the season, said the ICAC.

But even though growth in the Chinese textile industry may slow, China is still expected to use roughly a third of the entire world's cotton supply, about 31 percent, said the ICAC. U.S. mill use is expected to decline by more than 9 percent — to 1.45 million tons from 1.60 million tons a year ago — the lowest level in almost 20 years, since 1985, said the ICAC.

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