Post’s forecast for MY17/18 domestic cotton production is raised to 5.4 MMT, up 9 percent from the previous year. Higher cotton prices in MY16/17 and continued government support to cotton production stimulated acreage recovery. Favorable weather conditions also contributed to higher yield in MY17/18. China’s cotton use is expected to recover to 8.5 MMT in MY17/18 mainly due to the narrowing gap between domestic and global cotton prices. Yarn imports are expected to fall as domestic yarn made from cotton stocks becomes more price-competitive. Correspondingly, MY17/18 ending stocks are forecast to decline to 8.73 MMT with stocks to use ratio falling to 103 percent. Given the Chinese textile sector’s increasing demand for high-grade cotton, traders anticipate the government may increase its flexibility in issuing additional import quotas. Hence, China’s cotton imports are expected to increase to 1.3 MMT in MY17/18 from the 1.1 MMT in MY16/17. After falling to their lowest level in 14 years, China’s imports of U.S. cotton rebounded in MY16/17 and are likely to exceed 500,000 tons in MY17/18.