The global cotton area is forecast to fall by 8% in 2012/13

The global cotton area is forecast to fall by 8% in 2012/13

Cotton experts have lowered their estimates for cotton production for next season as falling prices lead farmers to focus on alternative crops - but say rising mill use and lower cotton prices could fuel a rebound in world cotton trade.

The forecast from Inter-governmental group the International Cotton Advisory Committee (ICAC) comes after cotton prices jumped to a record high of US$1.64 per pound in 2010/11, but dropped sharply in the current season.

For the first time in three years, it says, the crop is less attractive than the main alternatives. As a result, the Secretariat projects global cotton area to fall by 8% in 2012/13 to 33.3m hectares and production to drop by 6% to 25.1m tons.

Cotton production is expected to decline in most large producing countries, with the exceptions of the US, Uzbekistan, and Australia.

However, after two seasons at depressed levels, global cotton mill use is forecast to start growing again in 2012/13 - providing there is a recovery in global economic growth that boosts purchases of textile products and consumption of raw fibres. Largely driven by demand in Asia, global cotton mill use could rise by 3% in 2012/13 to 25.0m tons.

Together, rising mill use and lower cotton prices could fuel a rebound in world cotton trade in 2012/13.

Imports and exports are expected to jump by 9% to 8.4m tons. As global production and consumption are expected to roughly balance in 2012/13, global cotton stocks are forecast to increase only slightly, to 11.6m tons.