Cotlook ditched expectation of a further fall in world
cotton inventories next season, setting itself apart from other commentators,
citing the prospects of a strong US harvest, besides hopes for growth in Indian
The industry commentator, which is behind the benchmark Cotlook
A index of physical cotton prices, forecast a rise of 44,000 tonnes in world
inventories of the fibre in 2017-18, starting in August.
The estimate contrasted with a previous expectation of a
small decrease in stocks, of 47,000 tonnes.
And it placed Cotlook at odds with an idea from the US
Department of Agriculture of a 520,000-tonne drop in world cotton stocks next season.
The International Cotton Advisory Committee, an intergovernmental
group, forecasts a 960,000-tonne drop.
Cotlook's raised inventory estimate reflected an increased forecast
for world production, upgraded by 91,000 tonnes to 24.5m tonnes, down in the
main to improved ideas for the US harvest.
"Global raw cotton production is forecast to rise by 1.78
million tonnes, approaching 8%... as farmers react to the generally firm prices
and good yields obtained during the current, 2016-17 campaign," the group said.
It lifted to 4.18m tonnes its forecast for the US crop,
putting its figure in line with that of the US Department of Agriculture.
Cotlook also stood by more generous expectations for output in
top grower Indian, seeing the country's harvest at 6.29m tonnes, ahead of the
USDA's 6.10m-tonne figure, and a forecast from the ICAC of "just under 6m tonnes".
China vs rest of the world
The group also highlighted a "disparity" in inventory moves,
with China's stocks seen dropping by nearly 2m tonnes over 2017-18, as the
country extends a selldown of government inventories swollen by a now-reformed
guaranteed pricing scheme for growers.
In the rest of the world, "an addition of similar magnitude
is foreseen" cotton in inventories.