Cotton consumption to reach on an all-time high in 2018-19

With an anticipated global increase of 4%, the year 2018-19 is going to be the year that sees an all-time high in cotton consumption with a whopping number of 27.5 million tonnes. This figure was stated by the International Cotton Advisory Committee (ICAC) in their August 2018 edition of ‘Cotton This Month’. They also revealed that the end of this period will witness a drop of 1.6 million tonnes in the global reserves, thereby ending at 17.7 million tonnes.

At a low quantity of 7.5 million tonnes, stocks in China are expected to decrease for the fifth consecutive year and the stocks are projected to assume a stable number of 10.1 million tonnes.

On the other hand, the global production for the 2018-19 season will also decrease by 4% to the projected quantity of 25.9 million tonnes. The reason behind this increase is the decrease in cotton plantations for many producers globally. Despite the high prices of cotton, the production is being reduced as the deteriorating weather conditions and lack of available water are hindering the cultivation.

In their statement, ICAC said that, “Although China’s tariffs on US cotton helped drag international prices down from June’s season-high of 101.7 cents per pound, strong demand in Asia and Southeast Asia has helped them rebound by the beginning of August.”

They also projected heavy shift in the global trade patterns seeing the sour relationship between US and China, “China’s 25 per cent premium could prompt the US, the world’s largest exporter, to seek new markets for its fiber, while other major exporters such as Brazil are expected to fill the void by increasing their shipments to China, the world’s largest importer.”

This calls for increased production demands for the other cotton producing countries like India, US, Brazil, Pakistan, West Africa, Turkey, Australia and Uzbekistan. It all depends on the weather and water patterns, as the global cotton trade stakeholders breathed a sigh of relief due to the marginal increase of 1 per cent globally.