After five consecutive seasons of excess supply, overall global production of cotton has fallen below the estimated consumption in the 2015-16 season but international prices continue to remain weak due to very high levels of stock, the International Cotton Advisory Committee (ICAC) has said.
Notwithstanding a slew of support measures by governments across the world that touched a record 10.4 billion US dollar in 2014-15, production of cotton was below demand, ICAC said in a statement released at the end of its four-day 74th plenary meeting in Mumbai.
Large stocks accumulated as a result of governments’ intervention from 2011-12 to 2014-15 would remain the key factor in determining the fundamentals of the cotton market for the foreseeable future, it said observing that demand for cotton continues to expand at a slow rate as a result of sluggish world economic growth and strong competition from synthetic fibers, especially polyester.
In order to improve the prospects for cotton, the ICAC endorsed the recommendations of its Private Sector Advisory Panel, foremost being to ensure that fiber-content labels on textile products were more visible so that consumers could make informed choices, and also promote transparency in the supply chain.
The committee also favoured conducting a study on the economic factors underlying the growth of polyester production and demand, to enable members to better understand the dynamics of competition among fibers. It also advised members to encourage an increased diversification of the uses of cotton, including composites and technical textiles, and a wider use of cotton by-products throughout the value chain, to add value to the sector.
