Page 21 - November/December-2019

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Slight growth expected in cotton

consumption amid slowing economy

Slight growth, a mere 0.3 percent, in cotton price of cotton was lower than the previous season’s
consumption is expected to continue in the ending average of 88 cents per pound.
upcoming season, but global economic indicators
and continuing trade conflicts are dragging down the After a 99.5 cent per pound price at the start of the
industry’s multi-year winning streak, said the season, prices fell throughout the year. Global area
International Cotton Advisory Committee’s (ICAC) under cotton decreased by 1percent to 32.6 million
annual review. hectares. Global yield decreased slightly by 2 percent
to 790 kg/ha but remained above the ten-year average
According to the report by the ICAC, the global of 776 kg/ha. As a result, global production decreased
cotton consumption will continue the recovery it by 3 percent to 25.7 million tonnes.
began in the 2012-13 season, but the consumption
in 2019-20 will only increase by a mere 0.3 percent According to ICAC, weakening economic growth
this year over the previous year. The consumption in amidst trade issues set the environment for a
2019-20 season is projected to reach 26.2 million decrease in consumption with a near 1 percent loss
tonnes globally. to 26.2 million tonnes. With consumption exceeding
production, global ending stocks for the season
The ICAC cited global economic conditions as the decreased by 2 percent to 18.3 million tonnes.
reason for the slow pickup. It said that global
economic growth had slowed to the lowest levels in As ending stock levels in China lowered, the ratio of
decades and global trade disputes remain stocks held in China and stocks held outside of
unresolved, this has led to uncertainty for China inverted with 52 percent of global stocks now
manufacturing and investment activities. being held outside of China. Trade in cotton lint
increased by 2 percent to 9.2 million tonnes with the
For the cotton sector, which has been buoyed in USA, Brazil, West Africa and Australia leading in
recent years by the thriving textile industries of East global exports.
Asia and Southeast Asia, the recently revised IMF
forecasts of a global synchronised slowdown are The ICAC said that new uncertainties had emerged in
expected to stall growth for the region’s addition to the usual risks facing agriculture.
manufacturing activities and demand for consumer Following several years of relatively calm market
goods, the ICAC added. conditions, world agricultural markets today face
mounting risks, including policy uncertainty from
The ICAC said that global stocks at the start of the trade tensions. Open, transparent and predictable
2018-19 season were 1 percent higher than the trade is important for the cotton market and its role
previous season at an estimated 18.7 million tonnes. as an important commodity in the global economy,
At 84 cents per pound, the international reference the ICAC concluded.

November/December 2019