Cotton prices finished 2016 up nearly 12%, after surging on resilient Chinese demand, despite government auctions of stockpiled supply, which ate into import demand.
But markets have been moribund since August, thanks to heavy supply, enhanced by a large US crop.
Will markets find any bounce next year, or will continued selling in China, as well as an expected rise in US cotton planting, weigh on markets?
Investors give their views.
The secretariat forecasts that the season-average Cotlook A Index in 2016-17 will range between 66 and 83 cents a pound, with a midpoint of 74 cents a pound, which would be 4 cents a pound higher than last season.
Ups and downs of cotton prices,as measured by the Cotlook A
2016-17: 75 cents a pound (forecast)
2015-16: 70 cents a pound
2014-15: 71 cents a pound
2013-14: 91 cents a pound
2012-13: 88 cents a pound
2011-12: 100 cents a pound
The current season started with a large shrinkage in stocks, particularly from countries in the southern hemisphere, which saw ending stocks in 2015-16 fall by 21% to 1.6m tonnes, the lowest since 2009-10. The shortage in supply
has carried through the first few months of the 2016-17 season, as the bulk of the crop was still being harvested, keeping prices firm. However, world cotton production in 2016-17 is projected to rise by 8% to 22.8m tonnes, which may put pressure on cotton prices in the latter half of the season.
While prices for polyester, the main competing fibre, have risen in recent weeks, they still remain well below international cotton prices, making it unlikely that cotton mill use will expand this season unless polyester prices continue to rise.
New York cotton futures are forecast to gain marginally in 2017, after a period of short term harvest pressure, moving toward 71 cents a pound by the last three months of 2017, as heavy global stocks are further tightened, driving a global supply deficit for the third consecutive year.
As a result, we anticipate global stocks of 80m bales in 2017-18, reducing China's global share to 50%, from 60% in 2013-14.
However, expect the competing nature of man-made fibre - particularly polyester- and slow demand to cap rallies to 72 cents a pound in April to June 2017.
China's reduction in reserve stocks is expected to continue, with both government auctions and policies to limit imports, driving a projected 9.7m bale stock reduction in 2016-17 and 10m bale cut in 2017-18.
US acreage expansion will again feature in 2017-18... production is expected to meet some 17m bales in 2017-18, up from 16.2m bales this season."
We expect US cotton acreage to increase by at least 5% in 2017-18, as cotton has become more profitable for US farmers due to a decline in the cost of production and stable prices.
The US stock-to-use ratio will increase from 33% in 2016-17 to 41% in 2017-18, we estimate, while Indian cotton acreage should recover at least 7% in 2017-18.
We expect the global stock-to-use ratio, excluding China, to increase from 50% to 53%, in line with the USDA's estimate.
The global stock-to-use ratio should be 79% in 2016-17, with China still holding more than a year's worth of inventory.
The stocks should still be higher than in 2007-08 and 2008-09, when cotton averaged 60 cents a pound, but lower than in 2014-15 and 2015-16, when it averaged 64 cents a pound.
This should put moderate downward pressure on cotton prices.
By William Clarke