World cotton production is likely to be lower than consumption for the second year in a row. According to a recent CARE Ratings report, the demand-supply gap will support prices in cotton season 2016-17. However, due to the auction of its cotton reserves, demand from China—the world’s largest consumer—will be lower, which would counter the price rise. Also, low demand from China has increased the availability of the fibre globally putting downward pressure on the prices, the report added. In December 2016, global cotton prices remained stable on a month-on-month basis at nearly 79.5 US cents per pound. Meanwhile, in India, prices rose to Rs110 per kg in December.
