The International Cotton Advisory Committee (ICAC) and UK-based private consultancy Cotlook have raised estimates of world production of cotton during the 2017-18 period, based August-to-July. The ICAC raised its forecast by 1,90,000 tonnes (8,73,000 bales) to 25.57 million tonnes. Cotlook enhanced its prediction by 1,68,000 tonnes to 26.03 million tonnes. “A considerable reduction for Pakistan is more than offset by an expectation of increased output in several major producing countries, including India, China and Brazil,” reported Cotlook.

ICAC enhanced its estimate for world cotton inventories at the close of the season to 18.89 million tonnes, a growth of 3,43,000 tonnes year on year while Cotlook predicts significant growth in stocks to 8,41,000 tonnes; however, The US Department of Agriculture (USDA) holds a middle ground with a forecast of growth to touch 2.81 million bales (6,11,800 tonnes).

There is a discrepancy in India’s production forecast which the ICAC sees at 6.03 million tonnes; the ICAC at 6.63m tonnes and The USDA is at 30 million bales (6.53 million tonnes). Regarding Chinese cotton consumption, ICAC sees it at 8.12 million tonnes, Cotlook at 8.36 million tonnes and the USDA at 38.5 million bales (8.38 million tonnes).

It looks like an extra reason why cotton investors have a keen eye on the prospects of the growing supply of cotton, however, they are watching India as the possibility of an enhanced MSP would decrease the competitiveness of its cotton exports.