Cotton supply to fall in record output year

 The cotton supply includes beginning stocks and production, says International Cotton Advisory Committee (ICAC).

 Market fundamentals suggest that the Cotlook A Index will average 60 cents per pound in 2003/04, a 6-year high.

The ICAC price model indicates that a 100,000-ton increase in net imports by China would translate into an increase of about 2 cents per pound in the season-average Cotlook A Index.

 Net imports by China are projected to reach 600,000 tons in 2003/04, up 80,000 tons from last season.

 Higher prices would lead to increase in world production in 2003/04, from 19.2 million tons last season to an estimated 20.5 million tons.

 However, mill use is forecast to be up 200,000 tons to a record of 21.2 million tons this season. This will result in decline in stocks to fall to 8.1 million tons at the end of 2003/04.

 World cotton consumption in 2003/04 will be negatively affected by relatively slow world economic growth and by higher cotton prices.

 Cotton