News Column

Cotton Demand Expected to Increase

August 20, 2014

Nelson Gahadza

International cotton demand is expected to increase 5 percent to 24,5 million tonnes in 2014/15 selling season as prices of polyester and cotton converge. This is likely to bring sanity to Zimbabwe's cotton sector, the International Cotton Advisory Committee in Zimbabwe has said. The committee said after international cotton prices spiked in 2010/11, many spinners decreased the share of cotton in yarn in favour of greater use of polyester and the gap between cotton and polyester prices had widened.

"With polyester and cotton prices converging, world consumption of cotton is forecast to increase by 5 percent to 24,5 million tonnes in 2014/15," says ICAZ.

Cotton prices have been in contention in Zimbabwe as farmers demanded higher prices compared to what ginners are offering.

The committee said polyester prices remained fairly stable at around 74-76 cents per pound for most of 2013 and 2014 until dropping to 65 cents per pound in April of this year.

"During the same period, international cotton prices climbed higher, reaching 99 cents per pound at their peak.

"However, the situation changed significantly in July 2014, with the Cotlook A index falling to 80 cents per pound while polyester has climbed back up to around 73 cents per pound.

Furthermore, ICAZ said the price of cotton in China has also fallen from around 141 cents per pound during most of 2013/14 to around 126 cents per pound in the last few weeks.

Last year the crop was sold at $0,63 per kg. The 2013 cotton prices improved from gazetted minimums of $0,35 per kg as the season progressed, moving up to between $0,45 and $0,55 by July 2013, and closing the season at $0,63.

The country expects an increase in yield of over 200 000 tonnes from the 125 000 last year.

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Source: AllAfrica

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