Cotton prices for 2018/19 are forecast higher by both the International Cotton Advisory Committee (ICAC) and Cotton Outlook. ICAC’s newly released report has cotton prices averaging 84 cents per pound, drawn upward by the lowest projected inventories since 2011/12. The forecast calls for cotton at the highest average price since 2013/14, when prices soared to 91 cents per pound only to subsequently drop to 70 cents per pound two seasons later as China halted imports in an attempt to draw down domestic stocks. India, the world’s largest producer of cotton, has been experiencing yield losses due to severe bollworm infestation. ICAC projects a decrease in India’s harvested area by 12 million hectares in 2018/19.
Last week’s USDA Prospective Plantings Report projected cotton acreage to increase by seven percent in 2018. Coupled with higher forecast production out of smaller cotton producing markets like Brazil, this has Cotton Outlook, an analyst group that puts out the CotLook A Index, more optimistic on 2018’s global cotton supply relative to the ICAC forecast. The group forecasts production at 26.13 million tonnes, 800,000 tonnes higher than that reported by the ICAC. Gro Intelligence subscribers can keep up-to-date on developments in global cotton markets by accessing critical data and analytics.