Stort-term dip in cotton prices
January 19, 2004-- Home Textiles Today,
Cotton prices are still expected to rise by as much as 23 percent this year to a 12-month average of about 69 cents a pound, but recently prices have actually declined, helped by higher exports by Brazil and the United States, and lower estimates of worldwide consumption, the International Cotton Advisory Council (ICAC) reported.
In a monthly update of its worldwide pricing, production and consumption forecast, the consortium of worldwide cotton producers said that "higher estimates of exports by Brazil and the U.S. within the last month are one reason for the continued decline" in pricing, with prices dropping as low as 75 cents a pound, at one point.
Another reason for the decline, said the international cotton cartel, "is a decline in the estimate of world consumption."
Holding out hope for lower prices still next year, ICAC said production during the 2004/2005 cotton year "is expected to set a record."
After rising to an average of 69 cents a pound this year, ICAC has been forecasting that cotton prices next year will settle down to 53 cents, slightly lower than last year's average of 56 cents a pound.
World production next year — contributing to the price relief — will likely hit a new record of 21.9 million tons next year, said ICAC, due largely to stepped-up production in China, Australia, Pakistan and a handful of other countries.
WORLD COTTON SUPPLY AND PRICING FORECAST
(in millions of tons, except for cotton prices)
|2002/03 (actual)||2003/004 (proj.)||2004/05 (proj.)|
|Source: International Cotton Advisory Council (ICAC)
|Cotlook A Price Index||$0.56||$0.69||$0.53|