Global Cotton Consumption Is Hit By Slower Economic Growth

New data show that the global economic slowdown is dragging down global cotton consumption, and manufacturing activity in Southeast Asia is expected to be hit.

According to the International Cotton Advisory Committee (Internatio) The updated message of nal Cotton Advisory Committee (ICAC) predicts that cotton consumption will continue to grow in the next quarter, but the main economic indicators and sustained trade conflicts are dragging down the industry's many years of winning streak.

The data show that since the beginning of 2012/13, global consumption has continued to recover, but it is expected to increase by only 0.3% in, reaching 26 million 200 thousand tons. As the global trade disputes remain unresolved, cotton consumption growth has dropped to a new low for decades. This has led to uncertainty in manufacturing and investment activities.

In recent years, the cotton industry has been boosted by the vigorous development of the textile industry in East Asia and Southeast Asia. The IMF recently revised the forecast for the global economic slowdown, predicting that the region will stagnate in the growth of manufacturing activities and consumer demand.

In another update, ICAC pointed out that since the beginning of 2018/19, global cotton inventories have increased by 1% over the previous year, estimated at 18 million 700 thousand tons. The reference price of international cotton is 84 cents per pound, lower than the average price of 88 cents per pound at the end of last season.

At the beginning of this season, the price of cotton fell all the year after the price reached 99.5% per pound. The global planting area decreased by 1% to 32 million 600 thousand hectares. Global cotton output decreased by 2%, 790 kg per hectare, but still higher than the 10 year average level of 776 kg per hectare.

As a result, global production decreased by 3% to 25 million 700 thousand tons.

"In addition to the usual risks faced by agriculture, there are also some new uncertainties," ICAC said. "After years of fairly calm market conditions, today's global agricultural market is facing increased risks, including the policy uncertainty caused by trade tensions. Open, transparent and predictable terms of trade are crucial to the cotton market and play an extremely important commercial role in the global economy. "