Highlights from the June edition of Cotton This Month:
TradeTensions and Higher Stocks Add Uncertainty to the Cotton Market
The cotton market faces continued uncertainty due to the escalating US-China trade war, with prices under additional pressure due to a projected increase in global stocks.
There is some hope that American and Chinese representatives might be able to de-escalate the conflict later this month when they’re together at the G20 Summit in Osaka, Japan. However, the US government recently announced it will provide $16 billion in additional support to its farmers, potentially indicating plans for a prolonged standoff.
Prices have suffered from the escalating tariffs, dropping to a season-low of 76 cents per pound on May 14th. Although global consumption is expected to rise by 1%, production is expected to jump 7%, with the resulting increase in global stocks exerting further downward pressure on prices.
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About the International Cotton Advisory Committee (ICAC)
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 visitwww.icac.org.