Released on = April 17, 2007, 11:27 pm

Press Release Author = Namrata

Industry = Small Business

Press Release Summary = Increase reflected strong growth in China and to a lesser
extent in South Asia and South-East Asia.


Press Release Body = Global Trends in Fibre Prices, Production and Consumption

World fibre production grew by 5.8% in 2004, spurred by a 7.8% increase in man-made
fibre production. The increase reflected strong growth in China and to a lesser
extent in South Asia and South-East Asia.

Synthetics accounted for most of the growth, especially polyester, although
cellulosics grew faster. Output of natural fibres rose by only 2.9%. As a result,
their share fell to 40.5%-the lowest ever recorded. Cotton demand rose by 3.0% while
wool consumption was up by only 0.8%. In both cases, growth was encouraged by lower
prices. The cotton price fell from a high of 76.80 cents/lb in November 2003 to a
low of 48.60 cents/lb in December 2004, reflecting fears of high stocks. Although
there was some firming over the subsequent few months, the average price for 2004/05
as a whole was only 52 cents/lb. For 2005/06, however, the price will rise by 25.0%
to 65 cents/lb as stocks diminish. Demand will rise by only 2.3%, according to the
EIU-much slower than the 9.3% increase in 2004/05, despite higher usage in China and
South Asia. But output will fall by 8.0%, according to the International Cotton
Advisory Committee (ICAC), as lower prices have deterred plantings, and favourable
growing conditions in 2004/05 are unlikely to be repeated. Nonetheless, this will
still be the second highest crop on record.

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