World cotton market: trends and outlook.

摘要

The world cotton market is best characterized by the volatility of prices with a downward trend in the long run. In spite of the distortions caused by subsidies, cotton supply and demand are price-responsive. Cotton reached historic highs during the marketing year 2004-05, with unprecedented increases in world production and cotton mill use. The average world yield outperformed its previous record, and production jumped by 27% to surpass 26 million tonnes. The extremely favourable climatic conditions alone cannot explain such an increase in yield. The expanding use of new technologies, in particular biotechnologies, improves productivity and reduces production costs, sustaining supply. Subsidies maintain production in several countries where average costs are above market prices. The expansion of new cotton areas also contributes to the increase in world production. Because of its vital importance for the economies of many developing countries, cotton is one of the major issues of the negotiations on agriculture at the World Trade Organization (WTO). Cotton end-use consumption is affected by economic growth and by relative fibre prices. Cotton prices decreased in 2004, becoming competitive with those of polyester fibre, boosting mill consumption to 23.5 million tonnes during the 2004-05 marketing year, up 10%. Cotton consumption benefits from the elimination of quotas on textiles and apparel trade among WTO members since 1 January 2005, which exacerbates the downward pressure on retail prices. Mill use of cotton is inexorably shifting from industrialized countries to countries in Asia. China, the top producer, top processor and top importer of raw cotton, has been the driving force of the world textile industry since 1998. Net trade with China is the major factor which explains the year-to-year changes in cotton prices..