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Eight per cent rise in world cotton supply likely this year

World cotton supply is expected to rise by eight per cent in 2017-18 due entirely to an eight per cent expansion in the world’s cotton area. India is expected to remain the world’s largest producer in 2017-18 with output increasing by six per cent. After falling by six per cent in 2016-17, China’s production is projected to rebound by seven per cent.

World production of cotton is estimated at 30 million tons per year, with the main producers in 2016 being India and China. However, the United States remains the leading exporting country. Despite the rise of synthetic fibers, cotton remains a major contributor to the textile market, with a share of about 40 per cent.

The evolution of Chinese cotton stocks will continue to influence prices. More than half of the world’s stocks are held by China. High prices, sufficient soil moisture in dryland areas and beneficial weather during planting encouraged US farmers to expand their cotton areas by 18 per cent. Global demand remains dynamic with respect to US exports, which show record levels. Exports increased by more than 50 per cent between 2015-16 and 2016-17.

The rise in prices of the white fiber would not last, as Indian and Chinese production would remain high, and American production will stay high in the long-term.