The group said that the season-average Cotlook A Index doubled to a record high of US$1.64 per pound in 2010/11, but would fall in 2011/12 thanks to a forecast 8% increase in global production to 26.9m tons – in turn driven by recent high prices.

Most large producing countries would increase cotton production, with record levels possible in India and Australia, but the US could see production fall by as much as 12% to 3.5m tons, thanks to the severe drought in Texas.

In terms of cotton mill use, some renewed growth is envisaged thanks to the increased availability of cotton, moderated to a 2% increase because of relatively high prices and competition from chemical fibres.

A total surplus of 1.8m tons is expected in 2011/12, helping global stocks to recover by about 20% to 10.9m tons and boosting the stocks-to-use ratio to 43%, up from 37% in 2010/11.