Global cotton stocks are expected to decrease by 1% to 18m tonnes in 2019/20, marking the fifth consecutive season decline.
In its latest monthly update, the International Cotton Advisory Council (ICAC) says the global reduction is “completely due” to the 5.5% decline in China’s stocks to 8.4m tonnes. China is the only country expected to post a decline with the rest of the world forecast to show an increase of 3% to 9.6m tonnes.
ICAC, an association of cotton producing, consuming and trading countries, adds the market has already been facing significant uncertainty due to the ongoing trade tensions between the US and China, so the novel coronavirus outbreak (Covid-19) only clouds the outlook further.
Combined with the global economic slowdown, it says these developments have prompted the Secretariat to revise its current price projection to 79 cents per pound.
Meanwhile, with global consumption projected to remain steady, the decrease in stocks comes despite an expected 1% increase in global production. India’s crop is expected to jump 12% to 6m tonnes, with the US — the world’s largest exporter — posting a 9% gain to 4.4m tonnes.
Last month, the National Cotton Council (NCC) warned the potential impacts of Covid-19 represent a significant wildcard in the outlook for the world cotton market in the 2020 crop year.
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