The prevailing high prices for cotton “are expected to encourage farmers to expand the area under cotton by 5 percent, to 30.8 million hectares, in 2017/18,” says the International Cotton Advisory Committee. The upturn in plantings, rippling through to harvest, will mean sharply lower season-average prices, says the intergovernmental body—71 cents a pound, compared with the 79 cents a pound forecast for the current season.
Market prices would fall for the 2017 crop despite increased world cotton consumption and progress in working down a global cotton glut. The ICAC estimates that cotton mills, for the third year in a row, will consume more cotton than is harvested in 2017/18 and that the cotton inventory worldwide would contract by nearly 1 million tonnes, to 16.41 million tonnes. Still, the stockpile would be equal to an eight-month supply and would weigh on prices.
Uzbekistan is likely to be the only country among the six major cotton producers to plant less cotton this year than last year, said the ICAC. Uzbek plantings are forecast to fall by 4 percent while India, China, the United States, Brazil, and Australia should expand plantings. “Anticipating falling cotton prices early in 2017/18, cotton area expansion may be more limited for countries in the Southern Hemisphere,” said the ICAC.