After falling to their lowest level in September in more than half a year, cotton prices increased in October, despite falling demand and supply forecasts and a relatively weak global economy, according to data from the U.S. Department of Agriculture (USDA).
The seven-market U.S. average cotton spot price rose by more than $0.03 per pound between Oct. 2 and Oct. 30, a 5.7% increase, to $0.618.
The USDA has decreased its forecasts for both global production and consumption. The largest production declines are expected in China, Pakistan, Brazil and Australia, while the most significant changes in consumption are expected for China, Pakistan and India.
Current USDA estimates put 2015/2016 global cotton production at 107.4 million bales, down from 118.9 million in the prior year. This includes a drop in Chinese production of almost 5 million bales.
Global mill use is estimated to increase from 111.5 million bales to 112.3 million bales, with most of the increase in demand coming from India.
The ending stock estimate for the current season is now 107 million, a drop from 2014/2015’s 110.9 bales, but a 700 thousand bale increase over last month’s estimate.