Cotton price outlook harsh
Joan Gunin -- Furniture Today, August 2, 2006
Washington -- With the demand for cotton surging even as production dries up around the world, and as China continues to absorb a disproportionate share, cotton prices are forecast to rise almost 8% this year, before jumping up by more than 14% next year.
In a monthly update of its annual supply, demand and pricing forecast, the International Cotton Advisory Council (ICAC) said demand during the current cotton year is forecast to rise by 7.0%, to an estimated 25.0 million tons from 23.4 million a year ago. But cotton production around the world is expected to drop by 5.7%, creating a gap between supply and demand of almost 13% when compared with last year.
China and its textile mills will continue to drive world mill use, with Chinese consumption expected to reach a record 10.5 million tons next year, up about 6.1%, or 600,000 tons from last year. At that rate, Chinese textile plants will be using roughly 43% or the world's available supply of cotton.
Next year, the cotton growers said, India is expected to become the third largest cotton exporting nation, behind the United States and Uzbekistan . Indian cotton exports are forecast at over 800,000 tons next year.
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