US cotton prices set for sharp decline
Cotton prices have been reduced sharply
Cotton prices will fall “sharply” in the US in 2015/16 due to weak global demand for yarn and lower prices for polyester, according to the latest forecasts.
The US Department of Agriculture's (USDA) monthly World Supply and Demand Estimates report suggests that domestic production will fall 90,000 bales to 13.3m in 2015/16. Ending stocks are now projected at 3.1m bales, or 22% of total use, down from 3.2m last month.
Domestic mill use and exports are unchanged.
However, predicted average prices have been reduced three cents at the mid-point from last month to 54-64 cents per pound, as relatively weak global demand for yarn and lower prices for polyester pressure world cotton prices.
World production estimates are lowered 1.4m bales to 107.4m, including reductions for China, Pakistan, and Brazil, but is raised for Mali. Forecast consumption is down for China, Pakistan, and India.
But beginning stocks are raised 880,000 bales to 111.8m, mainly due to a reduction in China’s 2014/15 consumption, which reflects indications of net cotton textile exports that are lower than previously expected.
With world trade virtually unchanged from last month, ending stocks are lifted 710,000 to 107m bales.
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