September 6, 2012

China's cotton will triple over the next two years as local demand declines to its lowest since 2005.

USDA's figures show that global harvests are expected to exceed demand for a third year, swelling stockpiles around the world by 10% to US$74.67 million by August.

Cotton may drop 12% in price to US$0.68 a pound by the end of the year.

Slowing economic growth means the surplus will widen even as China, Australia, Brazil and India produce less this season, leading to the first global output decline in three years, the USDA predicted.

Prices have already plunged 65% from last year's peak of US$2.197 a pound.