The world's cotton-consuming countries are expected to import less cotton in the coming months as the executives who run their textile mills try to figure out how to survive in a time of decreasing demand for textile and apparel products.
The International Cotton Advisory Committee says total cotton imports or world cotton trade could decline by 12 percent to 34 million bales due to a projected 6 percent decline in global cotton mill use (to 114 million bales) in the 2008-2009 marketing year. That would be down from 121 million bales the last two seasons.
The lion's share of the decrease is expected to occur in China where the textile industry is suffering from its first slowdown in sales in years. Imports by China are anticipated to fall 24 percent to 8.7 million bales, according to ICAC.
“Lower expected global economic growth in 2009, projected declines in developed economies' income in 2009, tightening credit availability for spinning mills, and uncertainty regarding the consequences of the global financial crisis, are severely affecting cotton consumption worldwide,” it said.
World production, meanwhile, is expected to decline from 120.5 million to 113 million bales due in no small part to the reduction in U.S. cotton acreage and to unfavorable fluctuations in exchange rates.
“In particular, production is expected to fall by 30 percent in the United States to 2.9 million tons (13.3 million bales),” said the ICAC, an association of governments of cotton producing and consuming countries. “Production is also projected down significantly in Turkey and Brazil but could increase in India, Pakistan and Australia.”
The ICAC Price Model 2007 forecasts the 2008-2009 season-average Cotton Outlook A Index at 69 cents per pound. However, the Secretariat believes that the 2008-2009 season-average Cotton Outlook A Index may actually be in the lower half of the 95 percent confidence interval, between 62 and 69 cents per pound.