Cotton Crunch Accelerates in Asia

Washington — With China, India, and Pakistan sucking up world cotton stocks as the most important textile manufacturing nations, those three countries combined now represent two-thirds of all world cotton consumption — while they produce only half of the world's supply of the fiber.

In a monthly update of its annual supply and demand forecast, the International Cotton Advisory Council (ICAC), a worldwide consortium of cotton growers, said China, India and Pakistan will produce roughly 13 million tons of cotton during the current cotton year (2006/07), somewhat more than half of the 25.0 million tons of cotton forecast to be produced, setting a new industry benchmark.

But as the world's three primary textiles producing nations, those countries will use more cotton than they can possibly produce, about two-thirds of the entire world supply, said the cotton cartel. This proportion is far in excess of the roughly half of the world's supply they used last year.

World cotton consumption is forecast to reach a level of 25.6 million tons this year, up about 3.3% from last year. And those three nations are expected to eat up most of that, about 16.6 million tons, or 65% of the entire supply.

Cotton consumption in the rest of the world is projected to remain stable at about 9 million tons.

Putting upward pressure on cotton prices, consumption is expected to outstrip production once again this year, and yet again during the 2007/08 cotton-growing year, said the ICAC. At a level of 25.6 million tons, cotton consumption this year is forecast to exceed production of 25.0 million tons by about 2.4%. The same is expected for next year, said the cotton growers, with consumption pegged at 26.2 million tons, about 1.9% above the forecast production of 25.7 million tons.

World cotton imports are projected to reach 9.2 million tons this year, down 5.5 million tons from the record 9.7 million tons last year. Cotton ending stocks are pegged at 11.6 million tons this year, declining by about 2.6% from 11.9 million tons a year ago.