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World cotton area and production for the 1998/99 season depends on several factors with cotton prices and those of competing crops playing a crucial role. Cotton production also is influenced by domestic and world financial conditions, government policies, and weather. The Cotlook A-Index represents the price level of international raw cotton offered to the market on a dailly basis from several cotton trading countries. Using this index as a reflection of world cotton prices, it shows that cotton prices have declined for the past three years from the most recent peak of 91.4 cents per pound of lint in 1994/95. Since August of 1997, the index has dropped 21 cents per pound, with this May's price 15 cents below that of May 1997. This factor alone supports the current outyear forecast of 86.3 million bales with area at 32.7 million hectares. The outlook is below the 90.8 million bales and 33.4 million hectares currently estimated for 1997/98.
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