Global cotton output will exceed demand by more than forecast last month because of reduced purchases from China, the world’s largest buyer, according to industry researcher Cotlook Ltd.
The production surplus during the year that ends July 31 will be 3.296 million metric tons, up from last month’s forecast of 3.048 million, Birkenhead, U.K.-based Cotlook said today in a statement. The gap will narrow from 5.289 million a year earlier, partly because farmers have cut output.
Global production in the 2012-2013 season will reach 25.276 million tons, or 48,000 tons more than expected last month, Cotlook said. While that’s down from 26.698 million a year earlier, cotton use will be 21.98 million tons, the researcher said. Chinese demand, which last month had been expected to be unchanged, instead will drop by 200,000 tons to 7.6 million, Cotlook said.
Cotton futures have tumbled 29 percent in the past year and are down 66 percent since reaching a record $2.197 a pound on ICE Futures U.S. in New York in March 2011. The fiber fell 1.6 percent today to settle at 75.22 cents on ICE.
Cotlook, which has published cotton news for 85 years, issues the Cotlook A Index, which reflects cargoes delivered to Asia.