World cotton production for 2016-17 is expected to be seven per cent higher than last year. India will remain the world’s largest cotton producer, although its production is forecast to remain unchanged from 2015-16. Output in China is projected to decrease by four per cent while production in the United States is expected to grow by 24 per cent.

World cotton consumption may remain unchanged for 2016-17 despite the widening gap between polyester prices and international cotton prices. Mill use may rise in three of the top ten consuming countries — Bangladesh, Vietnam, and the United States. This will offset losses in China, Turkey and Brazil, where mill use is likely to reduce.

With China paring its cotton stocks, and demand continuing to surge, Indian cotton exporters see an opportunity for the current season. Currently, China is buying its cotton requirements from the US. But since Indian prices are as competitive as other international prices, exports may happen to China once the cash crisis in India subsides.

Stocks in China are expected to decline by 15 per cent by the end of 2016-17. But Indian shipments of cotton to Pakistan have remained muted due to border clashes. Pakistan is one of the major buyers of cotton from India.