ICAC expects higher cotton price despite inventory sales in China

The International Cotton Advisory Committee (ICAC) expressed concern yesterday about the situation on the cotton market, explaining that this was due to China's announcement that it intends to sell some of its high stocks. 

The ICAC estimates that Chinese stocks total 11.3 million tons, i.e. more than half of global inventories. Nonetheless, the ICAC still envisages an average annual cotton price of 71 US cents per pound in 2015, says Commerzbank.

Despite a possible supply deficit, we see the cotton price at 65 US cents per pound by year's end. The high worldwide stocks and Chinese sales should easily compensate for any such deficit.