A recent surge in cotton prices could be due to concerns about a tightening supply-demand balance outside of China as the country continues to build reserves, according to the International Cotton Advisory Council (ICAC).

The inter-governmental body said these concerns could have triggered the A Index rising to 98.85 cents per pound on 18 March before receding to 93.15 cents per pound on 26 March.

The US used to be the largest cotton exporter into China, with US shipments increasing from 50,000 tons in 2001/02 to 1.3m tons in 2011/12. Last season, India overtook the US, exporting 1.94m tons of cotton to China. However, midway through this season, Australia has surpassed both India and the US, exporting 578,000 tons into China.

Compared to the same period last year, Brazilian and Uzbek cotton remained stable at 284,500 tons and 189,000 tons respectively.

For the past five seasons, African countries contributed, on average, 10% of total exports to China. During the first seven months of the current season, Mali, Zambia and Zimbabwe have exported a total of 125,000 tons of cotton to China.

Planting is beginning in the northern hemisphere, with a 2% reduction in planting area is expected; the average yield is forecast at 754kg/ha, almost the same as in the previous season.

This season US cotton production is expected to increase from 3.4m tons to 3.7m tons, China is expected to decrease cotton production slightly from 7.4m tons to 7.3m tons, and India is expected to decrease cotton production from 6m tons to 5.6m tons.

ICAC projected global ending stocks for 2013/14 at 16.44m tons, down 0.31m tons on 2012/13, adding that 2013/14 production was likely to fall to 23.47m tones, down from 26.01m tons in the prior year.

Meanwhile, consumption is set to be flat at 23.71m tons, it added.