USA: Cotton Stocks To Decline Further In 2000/01

World cotton production is estimated at 19 million tons in 2000/01, about 100,000 tons higher than last season, but more than 1.1 million tons lower than in 1997/98, the International Cotton Advisory Committee announced today. The gap between world consumption and production is projected to be one million tons in 2000/01, lifting international cotton prices above 61 cents per pound during the first month of the season. The Cotlook A Index, an indicator of international prices, averaged 53 cents per pound last season, the fifth consecutive year of lower average prices. The combination of low cotton prices and relatively high chemical fiber prices driven by the increasing cost of crude oil, stimulated cotton consumption in 1999/00. Given that crude oil prices remain at a near twenty-year high and the continuing growth in the textile industries of India, Pakistan, Mexico, Brazil, Russia and Turkey, cotton consumption may achieve a new record of 20 million tons in 2000/01. Ending stocks are expected to decline to a five-year low of 7.7 million tons, while Chinese (mainland) stocks will probably fall to 2.1 million tons for the first time in ten seasons. China (mainland) will probably again become a net importer this season. Based on the ICAC price model, the Cotlook A Index is now forecast at 62 cents per pound in 2000/01 and 71 cents per pound in 2001/02.US production is currently estimated at four million tons, down 170,000 tons from the USDA August crop survey because of drought in some Southern states during August. US consumption is expected to remain stable at 2.2 million tons this season, and US ending stocks in 2000/01 may remain close to 900,000 tons. However, US exports are projected to reach 1.8 million tons, 300,000 tons higher than in 1999/00, reducing the stocks-to-use ratio from 0.24 in 1999/00 to 0.22 in 2000/01.