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Global cotton output

likely to rise: ICAC

WASHINGTON: Above average cotton prices during the 1995-96 season may lead to a global crop of more than 20 million tonnes, an international cotton group said.

World cotton production for 1996-97 is projected at 20.42 million tonnes, up from 19.41 million forecast for 1995-96 and well above the 18.63 million estimated for 1994-95, the International Cotton Advisory Committee said.

Surging prices which will lead to increased production and ample cotton supplies combine to "help to allocate more cotton in the world textile chain during the next two years, Carlos Valderrama, and ICAC economist said.

Despite flooding and bollworms in China and shortages of inputs in Central Asia, ICAC said prospects for 1995-96 and 1996-97 "point to world production increases each season of 800,000 tonnes of more."

Rising production will lead to a drop in the season averages of the Cotlook A index in 1995-96 and 1996-97, ICAC said, projecting an average price of 82 US cents lb in 1996-97, well below the 94 cts forecast for 1994-95.

Cotlook A index is an average of the five cheapest quotes for cotton in Northern Europe, complied by Cotlook Ltd, based in Liverpool, England.

However, ICAC pointed out substantial imports by China, increased global use and a cutback in barter sales by Central Asia are expected to prevent a repeat of the 20-cent-per 1b drop in the Cotlook A index seen between 1990-91 and 1991-92.

World economic growth was stronger than expected in 1994, and inflation was fully contained in industrial countries, ICAC said.

Given the link between economic growth and fiber use at the retail level, world consumption of textile fibers is expected to rise by about one million tonnes in both 1995-96 and 1996-97, ICAC reported.

However, ICAC pointed out substantial imports by China, increased global use and a cutback in barter sales by Central Asia are expected to prevent a repeat of the 20-cent-per 1b drop in the Cotlook A index seen between 1990-91 and 1991-92.

World economic growth was stronger than expected in 1994, and inflation was fully contained in industrial countries, ICAC said.

Given the link between economic growth and fiber use at the retail level, world consumption of textile fibers is expected to rise by about one million tonnes in both 1995-96 and 1996-97, ICAC reported.-Reuter