Global cotton production will rise 16 percent this year, outpacing the gain in demand from textile makers, as high prices encourage farmers to plant more crops, the International Cotton Advisory Committee said.
Output will total 25.3 million metric tons in the year that ends July 31, up from 21.8 million the previous season, the Washington-based group said today in an e-mailed report. Demand will rise 1.6 percent to 25 million tons from 24.6 million, ICAC said.
Cotton futures are up 71 percent this year on ICE Futures U.S. in New York as mills rebuild shrinking supplies, India limits exports, and adverse weather threatens crops. A cold front in China, the world's largest user of the fiber, and hail storms in Texas recently damaged fields.
"Plantings in large Southern Hemisphere producing countries such as Australia, Brazil and Argentina are projected significantly up from last season, driven by the current high cotton prices, and should result in considerable gains in production," Armelle Gruere, a statistician at ICAC said in an e-mail before the report.
Stockpiles will rise 4.5 percent to 9.3 million tons this year, from 8.9 million a year earlier, the group said. Cotton inventories held in warehouses monitored by ICE Futures U.S. totaled 12,286 bales as of Oct. 29, down 99 percent since June 1. A bale weighs 480 pounds, or 218 kilograms.
Price Forecast
The Cotlook A Index of prices in Asian ports will climb to an average of 92 cents a pound, 19 percent more than a year earlier, ICAC said. The index, which reflects the average of the five cheapest prices offered at Far East ports, rose 1.5 cents to $1.43 a pound today, the highest since reaching a record $1.47 last week.
Today, cotton prices in New York rose by the 4-cent exchange limit on mounting concern that global demand is exceeding supply. Cotton for December delivery rose 3.2 percent to settle at $1.2926 a pound on ICE.
The fiber reached a record of $1.305 on Oct. 26 and gained 23 percent in October, the biggest monthly gain since June 2007.
