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Wednesday, February 25, 2015

Cotton Pricing Outlook 2015

The cotton price chart has returned to what appears to be a more reasonable level.  Does this mean that cotton prices are set to spike again?
Cotton Price Chart retrieved February 24, 2015
Dr. John Robinson in the Department of Agricultural Economics at Texas A&M University has written a nice article 2015/16 Fundamentals, Outlook, and Caveats which is a helpful read.

Another resource that is worth reading is the Long term projection for textile fibre consumption according to the Cotton Guide from The International Trade Center.  According to their statements, the set of assumptions used to project world textile fibre and cotton consumption in 2010 and 2020 includes:

Annual average gross domestic product (GDP) growth since 1970 as a proxy for long-term GDP growth.

Population projections from the United Nations.

A long-term cotton price trend equal to average relative cotton prices between 2003 and 2005; and Increases in the ICAC Textile Fibre Price Index in tandem with inflation.

As you will see when you visit their website the Cotton Guide goes on to say, “World textile fibre consumption is projected to expand at an annual average rate of 4% to reach 70 million tons in 2010 and by 2.8% per year to reach 87 million tons in 2020. Lower rates of growth in world textile fibre consumption aremainly associated with lower world GDP growth (down from 5.3% during the 1960s to 3.3% during the 1990s) and lower growth of the world population (from 2.1% during the 1960s to 1.7% during the 1990s). Between 2000 and 2005, the average rate of growth of textile fibre consumption was 3.8%. World cotton consumption is projected to expand at an annual average rate of 2% to reach 26.7 million tons in 2010 and 32 million tons in 2020. Cotton’s share of the world textile fibre market is projected to decline to 37% in 2020.”  Obviously, this may get adjusted over time by the Cotton Guide, so you should most definitely visit their site to get the most current information in case they have made adjustments.  We retrieved above on February 24, 2015.

If you know other resources to help the fashion industry gauge the changes to cotton prices, please share your resources in the comments area below.


Learn more about cotton prices and relevant issues in our textile fiber section.

Thank you for taking the time to read our textile fiber blog post. We hope that you have found this news to be informative. If you have comments or questions, please add your thoughts in the discussion area below.

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