The ICAC has been projecting a lower world crop for the past couple of months. The earlier projections had put the crop size at 19 million tonne for the current year with the consumption rising to approximately 20 million tonne, leading to a rapid decline in the year-end stocks.

Attributing the decline in crop to the imminent drops in production in four out of the six large producers - India, Pakistan, Uzbekistan and Turkey, ICAC expects small increases to take place in the US cotton production.

Cotton consumption, the Committee expects, would exceed production by 1.20 milllion tonne for the season. The 2000-01 ending stocks are projected at 7.50 million tonne.

The international cotton prices, as measured by the Cotlook A Index, exceeded 65 cents per pound at the end of last month and the New York July futures contract was hovering around 70 cents per pound during the first week of December. "Economic fundamentals suggest that declining stocks will result in higher international cotton prices this season. The above average world economic growth in 2000-01 is expected to lead to further increase in cotton consumption," the Committee has stated.

Meanwhile, ICAC has requested the WTO to urgently consider the distortions created by subsidies in the cotton market so that a solution could be found in a timely manner as the world economy moves towards elimination of quotas affecting textile and apparel trade. The ICAC request comes after its 59th plenary meet at Cairns in Australia early November, where representatives from 30 member governments took part.

The members discussed production and export subsidies, import tariffs and other trade barriers that distort price, production and trade in cotton and cotton products. Various goverments expressed need for current multilateral negotiations in the WTO to continue to deal properly and effectively with production and trade distortions. Majority of the countries had urged for the elimination of practices and programmes that distort the prices, the ICAC approved plenary statement claimed.