World cotton supply may continue to grow in 2006-07

Mumbai, Apr 30 (UNI) World cotton supply and demand have reached record levels in 2005-06 and they are set to reach new highs in 2006-07, according to for forecast made by the International Cotton Advisory Committee (ICAC), In its latest issue, ICAC states that world cotton supply consisting of beginning stock plus production reached a record 35.7 million tonnes in 2005-06, and almost one million tonnes mroe than in 2004-05 and almsot six million tonnes higher than in 2003-04.

It estimates that world cotton demand recorded 15 million tonnes during the six month ended March 31,2006 and it will also reach a record at 24.5 million tonnes in 2005-06, four per cent higher than in 2004-05.

However, with world cotton production slated to exceed consumption for the second successive season, world cotton stocks are projected to swell to a record of 11.2 million tonnes at the end of the current season on September 2005.

ICAC has not made significant changes in its latest release from the previous one. However, it has slightly raised the estimate of world cotton consumption in 2005-06 to 24.50 million tonnes from the earlier 24.38 million tonnes. This is mainly because of the increase in the projection of Chinese consumption from 9.00 million tonnes to 9.20 million tonnes. This would be nearly a million tonnes higher than the estimated consumption of 8.33 million tonnes by China in 2004-05. Wolrd cotton trade in 2005-06 is projected to be 8.97 million tonnes, about 1.21 million tonnes higher than the estimated trade of 7.76 million tonnes in 2004-05.

ICAC has currently projected the season average priceat 58 US Cents (USC) per pound (as against 62 USC projected earlier), only six USC per pound higher than the season-average price in 2004-05.

ICAC states that the growing world cotton supply is preventing any larger price increase this season, despite record imports by China.

ICAC envisages the over supply situation to continue in 2006-07 although demand is expected to be higher because of the higher openign stock and production outstripping consumption.

About six per cent increase in area is expected in China and about three per cent in India. Production in northern hemisphere is estimated to be slightly higher by one per cent in 2006-07. A more significant production increase of seven per cent is, however, projected for southern hemisphere. ICAC's present estimate of world cotton production during 2006-07 is 25.43 million tonnes, nealry two per cent higher than in the current season.

World cotton consumption in 2006-07 is expected to touch a new high of 25.25 million tonnes, three per cent up from this year's estimated 24.50 million tonnes.

UNI VD AR PP VKG0944