Executive Summary
Highlights from the latest ‘Review’ regarding the 2018/19 season include:
• The year started with rising prices and ended with falling prices
• Global area decreased by 1 % to 32.6 million hectares (ha) and yield declined 2 % to 790 kg/ha
• World production slipped 3 % to 25.7 million tonnes
• More than half of global stocks (52 %) are now being held outside of China
• After a few years of relative calm, world agricultural markets face policy uncertainty and trade tensions
Global stocks at the start of the 2018/19 season were 1 % higher than the previous season at an estimated 18.7 million tonnes. At 84 U.S. cents per pound, the international reference price of cotton was lower than the previous season’s ending average of 88 cents per pound.
After a 99.5 cent per pound price at the start of the season, prices fell throughout the year. Global area under cotton decreased by 1 % to 32.6 million hectares. Global yield decreased slightly by 2 % to 790 kg/ha but remained above the ten-year average of 776 kg/ha. As a result, global production decreased by 3 % to 25.7 million tonnes.
Weakening economic growth amidst trade issues set the environment for a decrease in consumption with a near 1 % loss to 26.2 million tonnes. With consumption exceeding production, global ending stocks for the season decreased by 2 % to 18.3 million tonnes.
As ending stock levels in China lowered, the ratio of stocks held in China and stocks held outside of China inverted with 52 % of global stocks now being held outside of China. Trade in cotton lint increased by 2 % to 9.2 million tonnes with the USA, Brazil, West Africa and Australia leading in global exports.
New uncertainties have emerged in addition to the usual risks facing agriculture. Following several years of relatively calm market conditions, world agricultural markets today face mounting risks, including policy uncertainty from trade tensions. Open, transparent and predictable trade is important for the cotton market and its role as an important commodity in the global economy.
Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. The ICAC does not have a role in setting market prices or in intervening in market mechanisms.