Cotton in the Global Context

Production in 2004 was actually running
higher than consumption prior to 1995 and this has caused the existence of a world surplus of
baled cotton in the form of stocks in warehouse. It is the existence of these “ending stocks” that
has a large effect on the international price of cotton. Consumption began to
outpace production in 2001 to 2003 period and this, mixed with crop disasters in various regions,
caused the international price to rise. The reaction from many countries was to increase
production in reaction to this. Cconsumption failed to match this increase
in production, causing a fall in prices and a renewal of the world’s ending stocks.