The world-wide mill use and exports are expected to be 86.60 million bales and 25.30 million bales respectively. The ending world stocks will be lower than the current year at 38.50 million bales. The stocks-to-use ratio is expected to be higher at 119 per cent which may fuel the international prices of cotton.

Estimates of cotton production in United States for the 1998-99 season have been lowered by the authorities by a drastic 29 per cent which in the long run may affect prices of cotton in India.

Crop problems in Arkansas, Texas and California regions are likely to affect US crop. Chineseproduction is also expected to be down by seven lakh bales. According to traders in India, shortage of cotton crop internationally will lead to higher global prices which may in turn fuel alredy high prices in India.It is worth noting that during past couple of years the cotton prices in India have ruled higher than the international prices.

As a result the Indian cotton exports had become incompetitive but it seems that shortage in global cotton supplies will turn the tables this time around.

In this context it should also be mentioned that the cotton importers may find themselves in a fix as it would become expensive to import cotton on one side and may have to procure the same domestically also at higher price on the other side.

The already declining cotton textiles import may see situation worsening due to this factor, analysts informed.

Cotton exports may rise in the coming months and the export quota announced so far as well as the spill-over quota from the previous season may see its completeutilization, traders stated.

During the cotton year 1996-97, a total quantity of 16.82 lakh bales was exported.In the cotton year 1997-98, government announced a higher export quota of 7.20 lakh bales well before the commencement of the season.But the international cotton situation resulted in under-utilization of the quota.