World cotton consumption is projected to upsurge by five percent to touch 24.5 million tons, while cotton production to stand at 25.5 million tons in 2014-15, down from 26.1 million tons in 2013-14, according by International Cotton Advisory Committee (ICAC) as cotton and polyester prices congregate.

Asia is expected to grow strongly in cotton use in 2014-15, led by China’s five percent increase to 7.9 million tons. India’s cotton consumption is likely to grow by six percent to 5.4 million tons, while the rest of Asia is projected to see an expansion of eight percent to around 2.4 million tons.

The ICAC statement showed that after international cotton prices spiked in 2010-11, several spinners decreased the share of cotton in yarn for greater use of polyester. At the start of 2013, the gap between cotton and polyester prices widened.

Polyester prices remained fairly stable at around 74 to 76 cents/lb for most of 2013 and 2014 until dropping to 65 cents/lb in April this year.

During the same period, international cotton prices climbed, reaching 99 cents/lb. However, the situation changed significantly in July with the Cotlook A index falling to 80 cents/lb, while polyester climbed to around 73 cents/lb.

The price of cotton in China dropped from around 141 cents/lb during most of 2013-14 to around 126 cents/lb in the last few weeks.

Although monsoon has arrived in India, the volume of rainfall has varied widely and yield is likely to suffer in some places. India’s cotton production is expected to be just over six million tons in 2014-15. China, average yield which is around three times higher than India, is expected to produce around 6.2 million tons. The United States cotton production is projected to grow to around 3.5 million tons having experienced abundant rains this season.

According to ICAC said, exports from the US are expected to rise by nine percent to 2.5 million tons in 2014-15. While, trade is likely to see a decline of 7.9 million tons in 2014-15, driven mainly by a 26 percent drop in imports by China to 2.2 million tons. India’s exports are expected to decline to 800,000 tons, which would be less than half of its exports in 2013-14.

As this is the second successive year in which total purchases by the Chinese government exceeded sales, the government stocks have increased again and are estimated to stand at 11.4 million tons, the ICAC showed. China’s total ending stocks are around 11.9 million tons.

The Chinese government will close out 2013-14 having sold around 2.3 million tons of cotton, which is 37 percent of the 6.3 million tons purchased this season.

World stocks outside China are up by six percent to 8.6 million tons. This is the largest volume of world ending stocks outside China since 2007-08, when they reached 8.8 million tons and is weighing heavily on prices for 2014-15.