The content of first inclosure issued from 485th Session of Standing Committee held in Italy Embassy in Washington, US in Nov.14 is as follows:
The increasing international cotton price
During August-October,2006, A index of COTLOOK keeps at 59 cent/pound, increased by 4 cents than the same period of last year, but its price trendy is different: falling slowly, then ascend from August to October this year compared with the continual increasing, then fall in last year. The discrepancy from COTLOOK and New York cotton futures price stabilized at five cents in first of August, reaching 8cents /pound in first of September. Two reasons for it: first, US removing of Step 2 subsidy since August.1,06 lowed US inland cotton price to less than International price. Second, the biggest buyer of US cotton China reduces cotton stock.
The increasing speed of global cotton consumption for 06/07 will be slowed
riven by ascending China consumption, Global cotton consumption for 06/07 is forecasted to be 25.6million tons, up 3$ than last year while china cotton consumption will reach 10.2millin tons, accounting for 40% of global consumption.
Global cotton import for 06/07 is expected to be 9.1million tons, less 5% than 05/06. Since 2000/2001, global cotton import lies on China cotton import. China cotton import for 06/07 is estimated to be 3.7million tons, accounting for 40% among global import.
Since 05/06, some changes for international cotton export frame were made. India become third exporter who will export 830000ton cotton to overseas, mainly to China.
The forecast for cotton price for 06/07
Two factors make contrary effect on cotton price: 1) the application ratio of cotton stock outside China; 2) The ratio of net cotton import in China and the one in other countries
Except China inland, cotton ratio of stock and application dropped firstly since 02/03, from 86% for 05/06 to 78% for 06/07, which give a right impact to international cotton price.
China net cotton import decreasing by 13% than last year will make negative effect on international cotton price.
The forecast form ICAC shows that COTLOCK index for 06/07 will be 63 cents/pound. The secretary general of ICAC Standing Committee estimates that the cotton price for 06/07 will be 56 cent/pound, 63cent/pound detracting 63cent/pound.
