By JOSIE MUSICO

A world surplus of cotton is not good news for prices of the commodity, Wally Darneille said Wednesday afternoon.

Darneille, chairman of the National Cotton Council and president and CEO of Plains Cotton Cooperative Association, said in a guest speech to the Rotary Club more cotton has been produced in recent years than seems to be necessary. Like any other good, an excess could accompany a price drop.

“WeΆve had the supply exceeding the demand for several years,” he said. “WeΆre still producing more than weΆre consuming, and thatΆs never a good thing for prices.”

In todayΆs global economy, that supply faces fewer boundaries than it did a few generations ago. More than half the worldΆs extra cotton is now in China, the speaker continued. Darneille described ChinaΆs cotton stockpiling as an overreaction of sorts to fears of a shortage a few years ago. With a limited number of bales on hand and an abundance of textile mills that were ready to process them, China started planting and importing significantly more.

Now, itΆs hard to equate a shortage with the countryΆs millions of bales waiting in warehouses, or determine what the Chinese eventually plan to do with them.

“The Chinese government is controlling the stocks, and they are just keeping them,” he said.

The speaker continued that cotton prices are predictably on the low side, but could be worse.

While simple price glimpses from past years are not apples-to-apples comparisons because of inflation, cotton-produced goods still represent a smaller chunk of consumersΆ income, he said. For example, a shopper would have had to work many more hours a century ago than today to save the funds to purchase a new suit.

“Even if people say cotton prices are high, in real terms theyΆre historically really low,” he said. “... Prices are holding up very well considering the supply.”

The U.S. harvested about 7.54 million acres of cotton in 2013, according to figures from the National Agricultural Statistics Service. That number is down from 9.37 million in 2012.

Plains Cotton Growers announced its 41-county service area produced about 2.44 million bales of cotton last year, accounting for nearly 59 percent of that in the state.

While drought has impacted yields the past few harvest seasons, few would deny cotton reigns over any other South Plains commodity.

“Cotton is going to remain the most important crop out here for a long time,” Darneille said.