Last previsions of the International Cotton Advisory Council (Icac) indicate a drop in the prices of the 2019-2020 period due to a rise of 5% in production and 1% in consumption.
Price of cotton drops down. The production of the raw material will increase 5%, up to 26.9 million tons in the period of 2019-2020 that started in August. At the same time consumption will only grow 1%, up to 26.7 million tons, according to the last available data of the International Cotton Advisory Council (Icac).
This is the second period in a row that the offer will overcome the demand, which leads the global stocks to grow, up to 18.3 million tonnes.
Its expected that around 43% of the production will happen in China and India, two of the biggest producers of this raw material, key for the fashion industry. In the previous period, the Asian giant took the lead from India in the amount of cotton produced and for the following period estimations say that cotton production in both countries will be similar.
On the other hand, trade war between the United States and China has as a consequence that the American country, the biggest exporter of cotton in the world, to increase 24% its crop surface in other to rise 23% its production.
North American cotton exports dropped 8% in the 2018-2019 period. However, despite the drop in the external sales of the United States a growth of 2%, up to 9.5 million tons, in the North American global exports is expected.