World cotton production is forecast to increase seven per cent in the crop year that starts from August 2017. The higher 2017/18 cotton production projection is the result of favorable prices that are encouraging a rebound in area.

India, China, and the US are forecast to account for a combined 62 per cent of global cotton production in 2017-18.

Global cotton consumption is forecast to increase by two per cent as world economic growth recovers in 2017 and 2018.

After decreasing by three per cent in 2016-17, India’s consumption is forecast to recover due to competitive prices for its cotton yarn products, expanding capacity and the resolution of the consequences of demonetisation.

China’s mill use of cotton is forecast to increase by one per cent, accounting for 30 per cent of world cotton consumption. Mill use in Pakistan may grow by one per cent due to new incentives for textile exports while Bangladesh may witness a five per cent rise.

With over supply in major countries, cotton prices may remain subdued. Prices may also be tempered as China reduces its inventories by dumping cotton stock in world markets. Meanwhile, stocks in India, Brazil, the US and Pakistan are expected to rise in 2017-18 with larger crops forecast.