The global cotton surplus will be 1.8 percent smaller than forecast in November because of reduced output in the U.S. and demand from India and Brazil, said Cotlook Ltd., the publisher of a benchmark price index.
Production in the year that began Aug. 1 will exceed consumption by 3.617 million metric tons, down from the 3.683 million predicted last month and the year-earlier surplus of a revised 5.488 million, Birkenhead, U.K.-based Cotlook said today in a statement.
The research company cut its output estimate by 0.1 percent to 25.8782 million tons, including a 1.1 percent reduction for the U.S., the world’s largest exporter, where production will be 3.758 million tons. Revisions to the U.S. and unspecified other countries were partially offset by bigger estimates for Africa.
Consumption was estimated at 22.255 million tons, up 0.2 percent from last month, including a jump to 7.775 million tons by countries in the Indian subcontinent. China, the world’s top consumer in the 2011-2012 season at 7.8 million tons, will see demand slip this year to 7.7 million, the researcher said.
This year, prices on ICE Futures U.S. in New York have dropped 18 percent as global inventories expanded and economic growth slowed. Today, cotton futures for December delivery fell 0.1 percent to 75.83 cents a pound as of 2:30 p.m. on ICE.
Cotlook, which has published cotton news for 85 years, issues the Cotlook A Index, which reflects offer prices for cargoes delivered to the Far East.