Global Stocks Projected to Decrease 10% in 2018/19
 
The 2018/19 season is projected to see a 3% decrease in production, a 3% increase in consumption, and a 10% drop in global stocks, which would bring the world’s cotton reserves down to a level not seen since the 2011/12 season. The global stocks-to-use ratio is expected to drop to about seven months of mill use (0.61).

The decrease in global stocks will largely come from a drawdown in China’s warehouses. From March through August 2018, the Chinese State Reserve sold more than 2 million tonnes of fibre, reducing stocks to about 8.6 million tonnes. If production and consumption remain at current projected levels, the 2018/19 season is expected to further reduce stocks in China to 6.6 million tonnes, reflecting a 23% decline. 

Stocks outside of China are trending in the opposite direction, increasing 24% in 2017/18 to 10.1 million tonnes. The increase is expected to slow in 2018/19, ticking upward to 10.2 million tonnes. By the end of the coming season, warehouses outside of China are expected to house about 61% of the world’s global reserves.

Ending stocks in China reflect growing mill use in China and may signal the possibility of increased imports in 2018/19. Growing global demand in 2018/19, despite uncertainty about trade policies, may lead to price increases amidst a possible global production decrease.

Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. The ICAC does not have a role in setting market prices or in intervening in market mechanisms. For more information, please visit www.icac.org.