By admin       2018-08-06

August 3, 2018 - Washington – Stronger demand for cotton means prices are running higher than the season average. According to the latest report from the The International Cotton Advisory Council (ICAC), cotton consumption is projected to increase 4% to reach an all-time high of 27.5 million tons for 2018/19.Cotton Cools Down. Demand is climbing even as the cotton growing area for 2018/19 is expected to decrease in major producing countries including India (11.9 million hectares, down 3%) and the U.S. (4.25 million hectares, down 5%). ICAC expects the cotton area to remain stable in China at 3.3 million hectares. “Farmers’ ability to capitalize on the strong demand is limited due to environmental stresses and water availability,” according to the report. The Trump administration’s tariff activity is also impacting prices. China’s tariffs on U.S. cotton helped pull international prices down from June’s season-high of 101.7 cents per pound, but strong demand in Asia and Southeast Asia helped them rebound by the beginning of August. “Sour trade relations between China and the USA show little signs of improving, and could even deteriorate further in the near term, potentially causing major shifts in global trade patterns. China’s 25% premium could prompt the USA, 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,” the ICAC noted. After dropping from a season-high of 101.7 cents per pound in mid-June to 92 cents per pound in early July, prices have bounced back and remain higher than the seasonal average of 88 cents per pound

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