The International Cotton Advisory Committee (ICAC) projects global cotton reserves will reach the highest level ever recorded in its 83-year history of data collection, with China’s 23/24 stocks expected to rise to 9.16m tonnes.
As a result, global cotton stocks are poised to jump by 10%, following a 9% increase in the previous season (2022-2023), reaching 23.32m tonnes.
China is expecting a large jump to 9.16m tonnes and the rest of the world’s warehouses are also expected to swell to 14.5 million tonnes, indicating that there will be a substantial surplus of cotton production in the global market.
The surplus is projected to have an impact on the Cotlook A-Index, which aims to be representative of the level of offering prices on the international raw cotton market. It is anticipated to remain within the range of 85 to 95 cents per pound for the remainder of the 2023/24 season.
The global stock-to-use ratio is anticipated to increase to 1.00, equivalent to approximately 12 months of mill use. Furthermore, the global average yield for the 2023/24 season is expected to remain stable at 771 kg per hectare.
The ICAC says that given
average cotton prices and weakening demand, slight decreases in planted area
would be expected, but total planted area is projected to be 32.2
million hectares, which is what it describes as a “perplexing” 2% increase over
the previous season.
By Just Style