Global cotton consumption is projected to slow to an increase of only 0.4 percent in the 2018-2019 season, as many of the top consuming countries are seeing a slackening of usage of the raw material, according to a monthly update from the International Cotton Advisory Committee (ICAC).
This would mark the third straight year of consumption growth, though it is well below the 9.4 percent increase posted in the prior year, according to ICAC data. And part of that can be owed to President Trump’s trade war.
“The future of U.S.-China trade tariffs remains uncertain, and while they might soon be lifted, they might also be increased,” ICAC said. “That lack of clarity is making it difficult for growers in the Northern Hemisphere to make their planting decisions for the coming season.
Among the countries and regions expected to see slowdown in cotton consumption are East Asia, with a 6 percent increase projected compared to 14 percent the year before; Bangladesh is seen growing 7 percent from 15 percent in 2017-18, and Vietnam is projected to have just a 3 percent rise compared to seven straight seasons of double-digit growth.
China is expected to see its consumption growth slow to 8 percent after posting a 15 percent increase 2017-18.
On the other hand, Turkey, Indonesia and Uzbekistan are all projected to increase their consumption by double digits.
Global cotton production is forecast to be down 2.5 percent to 26.04 million tons this year, while ending stocks are projected to decline 6 percent to 17.64 million tons.
This slowdown in supply and demand looks to lead to a flattening of prices. ICAC noted that the Cotlook A index, an average of global prices, is forecast to dip to 87 cents per pound in 2018-2019 compared to a mean price of 88 cents per pound in the prior year.
The U.S. Department of Agriculture reported that spot quotations for U.S. cotton averaged 67 cents per pound for the week ended Feb. 28. This was up from 66.88 cents per pound a week earlier, but down from 78.60 cents per pound in the year-ago period.