International Cotton Advisory Board Says Global Cotton Prices Will Drop by Half by the End of the Year

According to the International Cotton Advisory Committee, headquartered in Washington, USA, high cotton prices will prompt global farmers to increase their cotton planting area in the next season. Global cotton prices may fall by half by the end of 2011. The average cotton price in 2011/2012 may be close to one dollar per pound.

On March 28, the May futures price of the May delivery of the Intercontinental Exchange fell to a close of 1.9443 US dollars per pound. In the past six months, cotton futures prices have almost doubled, as bad weather in major producing countries such as China and Pakistan has led to a reduction in cotton production and demand. On March 7, the cotton price of the ICE futures market rose to 2.197 US dollars/lb, setting a record high.

The USDA expects global cotton production in 2011/2012 to reach a record 127.5 million bales. The 2011/2012 US cotton planting area will increase by 20%.

In addition, according to the results of Bloomberg’s survey of analysts, analysts expect that U.S. households will substantially increase cotton sown area in 2011 because cotton prices have risen and set a record high.

Analysts expect US cotton plantings to reach 13.136 million acres in 2011, up 20% from the 10.97 million in the previous year.