Two years ago, world cotton production was the lowest in 13 years, due to smaller plantings and plunging yields. This year, the world will produce 14 percent more cotton than in 2017 for a harvest of 24.6 million tons, driving down the season-average cotton price by 13 cents a pound, says the International Cotton Advisory Committee.
The intergovernmental body says cotton prices will fall to 69 cents a pound for the 2017/18 trade year, which opens with this year’s harvest, under the weight of the large crop. Aided by an early monsoon, India would lead world production for the third year with 6.1 million tons of cotton, up 6 percent from the previous crop. China, the largest cotton consumer, would be second with 5 million tons, up 3 percent, and the United States, the leading exporter, would be third with 4.2 million tons, up 12 percent.
Cotton prices will sink because of a build-up in supplies outside of China, which is working down a large surplus. “Its share of world stocks is expected to decline to 44 percent, which would be the first time since 2011/12 that it held less than half of global stocks,” says the ICAC. “Stocks held outside of China are expected to rise by 17 percent to 9.6 million tons. This would be one of the highest volumes on record and indicates that prices should fall.”