Average cotton prices over the first six months of 2017 were 19.48 per cent higher than the first half of 2016. However, expectation is that cotton prices will tumble next season to the lowest in nine years. While Indian and Chinese cotton production remained stable after suffering a dip in 2014 and 2015 respectively, both are starting to show signs of stabilisation. In the same period, the US substantially grew its production, with Pakistan showing the most sustained growth over the past four years.

Since 2014, world’s cotton production has stalled, decreasing from 26.2 million metric tons to this year’s 22.5 million metric tons registered in June 2017 and 25.1 million metric tons as of July 2017. After five years of supply surpassing demand, production has fallen below consumption. At the end of the 2014-15 season, the world stock-to-use ratio stood at 0.89 (this is a key indicator showing available stocks were sufficient to cover almost eleven months of mill use.) Everything points to a long-lasting surplus of cotton worldwide which is made to push prices down.

Even with large reductions in 2015-16 and 2016-17, world stocks at the end of the current crop year are expected to be about 50 per cent higher than they were in the mid-2000s.