Cotton prices projected to fall again

Staff -- Home Textiles Today, 4/1/2002 12:00:00 AM

WASHINGTON —

With cotton production significantly outpacing consumption, cotton prices are projected to fall this year to their lowest level in 29 years, to an average of just $0.44 a pound, according to the latest updated pricing forecast from the International Cotton Advisory Council (ICAC).

That's the lowest level since cotton prices sank to $0.42 a pound in 1972/73 — equivalent to about $1.50 a pound in 2002, adjusted for inflation.

ICAC, a worldwide consortium of cotton growers, said suppliers are building stockpiles now to hedge against future price increases. "Spinners seem to be taking advantage of the historically low prices to replenish their stocks for future consumption," the ICAC said.

U.S. cotton prices, said ICAC, "are the most competitive in the world, and U.S. exports are projected to skyrocket to close to 2.2 million tons in 2001/02," up about 48 percent, or 700,000 tons, from last year, pushing U.S. export market share to 35 percent of the world total, up from 26 percent a year ago.

But those low prices won't last for long, and ICAC is projecting that supply and demand will come into better balance next year, pushing prices back up to $0.53 a pound.

WORLD COTTON SUPPLY AND PRICING FORECAST
(in millions of tons, except for cotton prices)