Global forecasting agency predicts larger rebound in global cotton stocks

In further reducing its forecast of world consumption during the 2011/12 season, which commenced on August 1, Cotlook Limited (a UK-based cotton market analyst) highlighted the negative influence of the deteriorating global economic climate on levels of demand throughout the textile value chain. Hope has faded that the recent moderation of cotton prices would create conditions for a swift recovery of consumption, said Cotlook. Compared with last month, the company has reduced its estimate of mill offtake in the Indian sub-continent by 215,000 tonnes, contributing to an overall drop in projected world consumption of 400,000 tonnes. Mill use of cotton worldwide is predicted to reach 23,523,000 tonnes, modestly below 2010/11.

Only modest changes have been made to its production estimates and the Cotlook still foresee a record world output this season of 27,079,000 tonnes, with farmers responding to phenomenally high prices last season.

As a consequence, a rebound in world stocks of no less than 3,556,000 tonnes is foreseen during 2011/12 (versus an upturn of 3,003,000 tonnes suggested last month), replenishing a global inventory that had fallen to very low levels during the previous two seasons.