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| The season-to-date average Cotlook A Index during the first four months of 2003-04 was 68.5 cents per pound. Supply and demand estimates suggested that the Cotlook A Index would average 65 cents in 2003-04.
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| During the last ten seasons, ICAC price projections at this time of the year were underestimated six times and overestimated four times.
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| World cotton production was estimated at 20.3 million tonne in 2003-04, up one million tonne or 5 per cent, from last season.
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| World consumption was projected to decline for the first time in five seasons to 20.7 million tons, down 300,000 tons.
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| Nevertheless, world ending stocks are projected to shrink by 400,000 tons to 8.1 million tons this season, the lowest since 199495.
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| However prices over the last 2-3 months were on a high, averaging at around 80 cents. ICAC had said in its latest projections that the higher prices would boost production and put a lid on cotton mill use in 2004-05.
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| Moreover, due to higher prices, world consumption of cotton outside China (mainland) was expected to stumble from 14.6 million tonne last season to 14.2 million tonne in 2003-04.
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| As a result, the potential for exports outside China (mainland) was shrinking and its imports imports were projected to reach a record of 1.2 million tonne this season.
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| This included around 60 per cent of US cotton, the same proportion as last season. US exports were projected to remain at 2.6 million tonne in 2003-04, 39 per cent of world exports.
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| Assuming normal weather, production in China (mainland) was projected to jump to 6.2 million tonne, up 1.2 million tonne.
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| Therefore, net imports by China (mainland) were forecast to decline to 950,000 tonne, down 200,000 tonne.
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| The world stocks-to-use ratio outside China (mainland) was projected to increase from 56 per cent in 2003-04 to an unprecedented 61 per cent in 2004-05. |
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