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Cotton prices remain high

Global cotton prices are likely to remain firm amid tight demand-supply conditions. International prices have remained high. Consumption is expected to outpace production thereby leaving less room for a bearish trend in cotton prices.

World cotton production for the 2016-17 crop year is estimated at 22.83 million tons — higher by 1.76 million tons than the 21.07 million tons produced in 2015- 16.

Global consumption of the fiber for 2016-17 is estimated at 24.25 million tons, up 0.05 million tons than the consumption of 24.20 million tons during 2015-16.

The fall in production during 2015-16 crop year was not anticipated and has led to a 14 per cent decline in both world ending stocks and in stocks outside of China. This pushed cotton prices up till the end of the last cotton season.

In India cotton prices were at lower levels almost during the entire 2015-16 season, resulting in lower realisations. This has led to a reduction of over 10 per cent in the acreage under cotton during 2016-17.

However, due to the improvement in productivity expected on account of better weather conditions across all cotton growing regions of the country, the country expects to produce about 345 lakh bales during 2016-17.