World cotton prices in 2012 were influenced by competing forces, with world demand rising after a two-year decline and elevated stock levels creating uncertainty about future prospects. High prices for grains and oilseeds helped sustain cotton prices, which nonetheless were below those a year earlier for virtually the entire marketing year. World cotton stocks rose for the third consecutive year, but most of the increase was accounted for by official reserve building in China. Consumption continued to decline in China – the world’s largest industrial consumer by a large margin – but rose in a number of other countries as China’s yarn exports rose sharply. Lower world production is widely foreseen in the coming year, with early reports indicating an intention of US farmers to plant 4 Mha, a 19% decline. China’s area is also expected to decline, despite a relatively high support price.