Cotton prices will remain weak as supplies of cotton outstrip demand and surpluses grows, says Textiles Intelligence. The average price of cotton has been falling and is forecasted to fall further. One factor affecting the price of cotton is weak demand caused by uncertainty arising from the US-China trade war. Until relations between the two countries improve, demand for cotton will remain suppressed and so will the cotton price unless there are major revisions to crop estimates or there are signs of greater strength in the global economy. The continued weakness in cotton prices has been reinforced by an increase in the size of the global stockpile. Surpluses are growing in the main producing nations, and stock levels at the end of the 2019-20 season are expected to be 1.3 per cent higher than they were at the beginning.

Pressure on prices will continue into 2020-21 as demand is forecasted to remain weak while yields are expected to improve as a consequence of better weather conditions. In fact, the global cotton crop in 2020-21 is forecast to reach its second highest level ever.

Global consumption of cotton is expected to rise in the 2019-20 season as Chinese demand stabilises. But there is also expected to be a rise in global cotton production as yields in India rebound and plantings increase in the USA.