World cotton production in 2017-18 is expected to rise 11.6 per cent from the previous season. International cotton prices fluctuated within a fairly narrow range during August. Market activity remained sluggish during most of August.
Basis levels remained firm, and the strong premiums applied to nearby lots engendered caution in some mills, which was exacerbated by the bearish statistical position and approaching availability of new crops. Import demand emanated from several markets, mainly for Brazilian and US cotton, among others. Several Far Eastern markets registered sales for the first quarter of 2018.
Hurricane Harvey in the US arrived over the worst affected areas as picking was in full swing. As cotton in the affected region constitutes the earliest of the US crop to be picked and transported, a further tightening of the already restricted supply seems unavoidable.
Planting data shows a considerable increase in planted area in India, to almost 12 million hectares, a figure likely to be surpassed as planting continues in several major producing states. Generally good weather conditions have contributed to optimism regarding yields. A sizeable crop is expected to weigh on prices and stimulate consumption. In China, helpful weather conditions and an expectation of good yields have bolstered production prospects.