“Despite tightening stocks, little change is expected in cotton prices in 2015/16, while the U.S. season-average farm price is expected to fall 3.8 per cent, and no change is expected in the A-Index,” the agency explained.
In its latest December report, USDA has forecast world cotton production in 2015/16 at 103.7 million bales, 13 per cent below last season, as lower#
In addition to a continued high level of ending stocks in China, other factors affecting year-to-year price changes include relative tightness of supply for certain qualities of cotton and the strengthening of the US dollar.
During the course of 2014/15, the US dollar rose 14 per cent in inflation-adjusted terms, and it has generally continued rising since July 2015.
“While the relatively tight supplies of high-quality cotton have helped sustain the A-Index in 2015/16, exchange rate shifts have had a negative impact on commodity prices in US dollar terms, including cotton,” USDA observed. (AR)
ALCHEMPro News Desk – India
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