ICAC - Cotton This Month
Global Stocks Expected to Drop by 1% in 2019/20 Season
Date Posted: 2 March 2020
Highlights from the March 2020 Cotton This Month include
• Global stocks are expected to decline for the fifth consecutive season
• China is the only country expected to post a decline
• Consumption is expected to be steady and production is expected to grow by 1%
• With prices under pressure, the Secretariat’s price projection is 79 cents per pound
For the fifth season in a row, global stocks are expected to drop in 2019/20, decreasing by 1% to 18 million tonnes. The global reduction is completely due to the 5.5% decline in China’s warehouses to 8.4 million tonnes; the rest of the world is expected show an increase of 3% to 9.6 million tonnes.
With global consumption projected to remain steady, the decrease in stocks comes despite an expected 1% increase in global production. India’s crop is expected to jump 12% to 6 million tonnes, with the USA — the world’s largest exporter — posting a 9% gain to 4.4 million tonnes.
The market has already been facing significant uncertainty due to the ongoing trade tensions between the USA and China, so the outbreak of Covid-19 only clouds the outlook further. Combined with the global economic slowdown, these developments have prompted the Secretariat to revise its current price projection to 79 cents per pound.