Cotton prices to fall on lower import forecast for China

MUMBAI (Commodity Online): Global cotton prices may drop down further in 2012-13 as US Department of Agriculture (USDA) in its report “Cotton : World Market and Trade” has lowered the import forecast of China.

According to USDA, forecast is made on the basis of some following assumption:
- China is likely to buy more cotton from domestic market than importing.
-The country is expected to release the cotton from the reserve to make up the existing supply- demand gap.
- The imports are likely to be restricted.

Global cotton production for 2012-13 is projected at 116.7 million bales, almost 5% lower than 2011-12.

The lower pricing of the commodity in 2011-12 has been the major reason for the drop in production. However, it is expected to surpass consumption.

In India, the exports are likely to lower in 2012-13 on back of lower production and increased demand from the domestic mills.

In Inter-Continental Exchange (ICE), the cotton for May delivery traded down 2.81 cents to 79.01 cents per bushel on Friday.

And in India’s National Commodity and Derivatives Exchange (NCDEX), the commodity for February delivery traded down 3.74% to Rs 1027.5 per qtl on 11th May.