However, production is expected to drop by 17% to 3.9 million tons in the United States and by 21% to 620,000 tons in the African Franc Zone, due to reductions in area. Asia is expected to account for 58% of world cotton production, up from 55% last season.
Sustained global economic growth will continue to lift the world textile industry in 2007/08. However, projected increases in cotton prices are expected to slow the growth in world cotton mill use to 3%, down from 6% in 2006/07.
China (Mainland)'s textile industry will continue to drive world cotton mill use in 2007/08. However, the growth rate of mill use in China (Mainland) is forecast to drop from 11% in 2006/07 to 6% in 2007/08.
At a projected 11.1 million tons, Chinese mill consumption of cotton would be double the level of 2000/01 and account for 41% of global mill use.
Mill use in the rest of the world is expected to grow by 2% to a record 16.1 million tons (8% higher than in 2000/01); expected increases in South Asia, the Middle East and Central Asia will offset declines in other regions.
The gap between production and demand in China (Mainland) is expected to rise in 2007/08. As a result, Chinese imports are expected to rebound to 3.5 million tons, lifting world cotton trade to 8.9 million tons.
U.S. exports are expected to jump to 3.7 million tons, up 29% from 2006/07. Record production in India in the last several seasonsinflated domestic stocks and boosted exports.
Indian cotton exports are expected to continue to increase in 2007/08 to over one million tons, making India the second largest cotton exporting country behind the United States.
The Secretariat, using the ICAC Price Model 2007, forecasts a season-average Cotlook A Index of 71 cents per pound in 2007/08 (the 95% confidence interval is between 62 and 80 cents per pound).
The main variables in this model are the stocks-to-mill use ratio in the World-less-China (Mainland) and the stocks-to-mill use ratio in China (Mainland).
The projected price increase in 2007/08 is the result of an expected significant decrease in the stocksto- mill use ratio in the World-less-China (Mainland) in 2007/08. This price forecast takes into account the monthly averages of the Cotlook A Index in August and September 2007.
International Cotton Advisory Committee
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