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Cotton Prices End 2015 3% Higher than Year-Ago

The cotton market was relatively quiet in 2015, with prices rising 3 percent for the entire year, according to data from the U.S. Department of Agriculture (USDA).

Over the past year, the seven-market U.S. average cotton spot price increased by less than $0.02 per pound, to $0.618. The low for the year, just over $0.56, was reached in late January. The high of almost $0.65 happened in June.

Soft cotton prices are expected to continue as reductions in both supply and demand grip the world market. The USDA has decreased its forecasts for both global production and consumption. The largest country-level reductions for both production and consumption figures have been for China. The forecast for Chinese mill-use fell by 3.5 million bales to 32.5 million (a decline of 3.5 million).

Production declines from last year are also expected in Pakistan, the U.S. and Brazil.

Current USDA estimates put 2015/2016 global cotton production at 103.7 million bales, down from 118.9 million in the prior year, and just above the recent low set in the 2009/2010 season. Since its initial forecast was issued in May, the USDA has steadily revised its forecasts for global production downward. It is now 7.7 million bales lower than it started, with the drop in the Chinese production estimate comprising 2.7 million bales.

The initial forecast for world mill-use was 115.5 million bales and the current estimate is 111.4 million (a decline of 4.1 million), an increase of one million bales over last year.

Although mill use in China, India and Pakistan are expected to decline, Vietnam and Bangladesh are also expected to increase their mill use in the current season.

The ending stock estimate for the current season is now 104.4 million, a drop from 2014/2015’s 112 million bales.