The Hindu Business Line : Supply imbalance likely in global cotton

GLOBAL cotton supply and demand are poised to undergo significant changes in 2002-03 while world trade is set to expand. The changes will have implications for cotton prices that have been ruling at historically low levels.

On current reckoning, a 8.2 per cent lower production and 2.6 per cent increase in consumption will lead to a 12.5 per cent decline in ending stocks, while world imports will rise by 5.5 per cent.

The latest assessment of the US Department of Agriculture (USDA) showed world cotton output will decline in 2002-03 to 19.58 million tonnes (21.34 mt) primarily because of fall in all the major origins China, the US, India and Pakistan. India's cotton output is forecast at 2.50 mt (2.65 mt).

World use of cotton, on the other hand, is forecast to rise modestly to 20.94 mt (20.40 mt) with all major consumers forecast to raise the level of consumption. India's cotton use is expected to rise by 3 per cent to 2.96 mt. Global import volumes are forecast to rise to 6.69 mt, up from the estimated 6.34 mt of 2001-02. Imports into China are forecast to rise seven times to 435,000 tonnes, while India's import requirement is placed 14.3 per cent higher at 435,00 tonnes (381,000 tonnes).

The US will continue to dominate global cotton exports in 2002-03 with a share of 2.35 mt. Other origins such as Uzbekistan, Australia, Greece and some African producers will share the export market.

The global ending stocks are forecast to reach 8.96 mt (10.24 mt), the lowest level in recent years. China and the US will account for bulk of the ending stocks although their stock holding will decline from the previous year.

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