Inventories Rose &Nbsp; Cotton Prices Remained Downward Pressure.

Although India, the world's second largest exporter of cotton, banned cotton exports last week, the latest report released by the US Department of agriculture in March 9th concluded that global cotton production will continue to exceed consumption in the year 2011/12 (August 2011 to July 2012) and 2012/13. The annual inventory consumption ratio in 2012/13 is expected to rise to the highest level in 11 years. The increase in inventory will bring downward pressure on cotton prices.

Affected by this news,

Inventory consumption rose to a new high of 11 years.

In the global cotton market and trade report released on that day, the US Department of agriculture raised the estimated value of global cotton production in 2011/12 from 123 million 340 thousand packages to 123 million 640 thousand packages (480 pounds / pack), reducing global consumption from 109 million 710 thousand packets to 108 million 720 thousand packs, lifting the global carry on inventory from 60 million 770 thousand packages to 62 million 320 thousand packages.

From 2009/10 to the current 2011/12 year, global cotton production has increased for three consecutive years, and annual carry over inventory has also been rising for three consecutive years.

If the Ministry of agriculture's expectation of 2011/12's carry over inventory is coming true, it will grow by 32% over 2010/11.

The Ministry of agriculture also predicts that global cotton output will fall to 118 million 500 thousand bales in 2012/13.

According to the Ministry of agriculture, although the global cotton production is expected to decline and consumption will rise, cotton production in 2012/13 will continue to exceed consumption in third consecutive years, leading to a global cotton inventory consumption ratio rising to its highest level in 11 years.

The report shows that the global cotton inventory consumption ratio was 38% in 2009/10, and increased to 41% in 2010/11.

The Ministry of agriculture predicts that this ratio will rise to 57% in 2011/12, and further increase to 58% in 2012/13.

The Ministry of Agriculture said that "rising inventory will bring downward pressure on prices and support consumption growth."

India or reconsidering export ban

Though considered

The US Department of Agriculture said that on the one hand, the Chinese government has announced that it will raise the price of cotton purchase and storage in 2012/13, which will attract more cotton into the reserve stock.

This reserve inventory size may account for more than 1/4 of the global carry over inventory in 2011/12.

On the other hand, the India government recently announced restrictions on cotton exports, bringing uncertainty to the global market supply of cotton.

In March 5th, under the influence of India's ban on cotton exports, cotton futures on the New York Mercantile Exchange rose 4.53% to 92.23 cents a pound on that day.

But according to Bloomberg 9 reported that India may reconsider the implementation of the ban on cotton exports.

Paavo, Minister of agriculture of India, said restrictions on exports would affect farmers' enthusiasm for planting.

Statistics show that cotton prices in India hit a record high of 61 thousand and 700 rupees per 356 kilograms in March 2011, and cotton prices are now hovering at 34 thousand to 35 thousand rupees per 356 kg.

According to the US Department of agriculture, India's cotton supply accounts for 17% of global exports in 2011/12.

80% of India's exports of cotton are sold to the Chinese market.