WASHINGTON (Commodity Online): Global cotton production in 2010/11 is forecast at 24.2 million tons up nearly 10%, according to International Cotton Advisory Committee (ICAC). The production in China is forecsted at 7.7 mn tonnes in 2010/11, one million tons higher than in the current season. Most of the gain is expected to come from increased area in response to higher domestic prices.
Production in India is estimated little changed from 2009/10 as most of the gain in yields tied to improved technology has already been achieved. U.S. production is expected to climb by one-tenth to reach three million tons, primarily because of increased cotton area. Production in Pakistan, Brazil and Uzbekistan, collectively, is estimated at 4.6 million tons in 2010/11. The three countries are accounting for 4.3 million tons of production in 2009/10.
Forecasts by the IMF, UNCTAD, the U.S. Federal Reserve and OECD all indicate that the recovery in world GDP growth during 2010 and 2011 will be gradual. Accordingly, since income growth is an important explanatory variable in models of fiber use, projections of world fiber use at the consumer level for 2010 and 2011 indicate only modest growth.
Based on the expected change in the ratio of ending stocks to use outside China and the average Cotlook A Index to date, the 2009/10 Cotlook A Index is estimated at 70 cents per pound. The 95% confidence level extends from 64 cents to 77 cents.