Demand for cotton fibre is set to rise by 0.1% in the 2018/19 season (August 1, 2018-July 31, 2019), according to the International Cotton Advisory Committee (ICAC). This increase is much slower than in the previous season, reflecting a slowdown in global economic growth and uncertainty regarding future trade relations between the USA and China. That said, production of cotton will decline by 2.5% and, as a result, demand will still exceed supply and stock levels will fall. However, the fall will be small and confined to China, which means that any downward pressure on prices will remain limited. According to the ICAC, the cotton price is expected to average 87 US cents/lb in the 2018/19 season-which would be 1 US cent/lb lower than in 2017/18. In the 2019/20 season, global cotton consumption is expected to be up by 1.6% as Chinese demand recovers, according to the ICAC. This would coincide with a 6.0% rise in the cotton crop, stemming largely from a rebound in yields in India and improved plantings and a strong recovery of the crop in Pakistan. As a result, demand for cotton will be at a similar level to supply and therefore the picture for 2019/20 looks likely to be one of balance. Consequently, the cotton price is expected to remain steady in the early part of the season, provided there are no unforeseen shocks. However, some slight downward pressure on the cotton price is likely thereafter, resulting in an average for the 2019/20 season which is lower than the average for 2018/19.
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