World cotton stocks to fall less than expected - Cotlook


World cotton stocks will shrink by less than thought this season, due to reduced demand from Vietnam, and higher world production Cotlook said.

Cotlook forecast the world cotton deficit, the degree to which demand is expected to outstrip supply, at 1.58m tonnes.

Last month, the organisation had estimated the deficit to be 1.8m tonnes.

Production up

Ideas of global cotton production in 2016-17 were lifted by 70,000 tonnes, compared to last month.

"The change, mainly attributable to increases for the US and the African franc zone, is partially offset by reductions for Uzbekistan and Australia," said Cotlook.

US cotton production will rise by 79,000 tonnes to 3.5m tonnes.

In the African franc zone, the African countries which use the Central and West African franc, output will rise by 30,000 tonnes to 1.0m tonnes.

However, cotton supplies in Australia, impacted by lack of rain, will shrink by 50,000 tonnes to 900,000 tonnes.

In Uzbekistan, output will shrink by 10,000 tonnes to 800,000, as farmers struggle to meet the government's production quotas.

Demand shrinkage

In contrast to rising production, cotton consumption is expected to shrink, Cotlook said.

Consumption in Vietnam is expected to fall by 80,000 tonnes to 1.23m tonnes.

In other smaller markets, it is also expected to fall around 89,000 tonnes to 2.92m tonnes.


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