China alone explains why cotton prices have not fallen to an all-time low, and indeed are proving surprisingly involatile, and why production has continued to drive a build-up in world stocks of the fibre.
"The significant features of the cotton industry at the start of 2013 are those that are not happening," the International Cotton Advisory Committee said.
These include a dearth of price volatility, with the gap between market highs and lows, typically 34% over average Cotlook A physical prices over a full season, running at 9% in the first give months of 2012-13.
There has also be a lack of a production response to huge supplies, with output set to remain some 10% above consumption in 2012-13 – lifting stocks to the equivalent of 70% of consumption, the highest figure since the end of World War II.
"Accordingly, prices might be expected to be record low," the ICAC, an intergovernmental group, said.
The stocks-to-use ratio is a key pricing metric, indicating the looseness of supplies and thereby the level of competition needed among buyers.
"However, the Cotlook A index has averaged 83 cents per pound so far this season, well above the long-term average of 69 cents per pound."
Stockpiling by the China of some 9m tonnes of cotton for state reserves - which began in 2011-12 and will continue through March of this year - explains the anomalies, the committee said.
"More than 10m tonnes could be in the reserve by that time.
"With 25% of 2012-13 global cotton supplies being held away from commercial channels, prices have not dropped further.
"But buyers, knowing that the reserve exists and could be liquidated, are reluctant to pay more."
Meanwhile, world production "is higher than it would be in the absence of the price-support activity".
The importance of China in world cotton dynamics underlines that the cotton market's "main source of uncertainty is the future of Chinese policy toward the reserve, including how reserve cotton will be handled", the ICAC added.
The comments came as the group trimmed by 300,000 tonnes to 15.3m tonnes its forecast for world cotton reserves at the close of 2012-13, reflecting a slight dip in harvest prospects, and slightly higher hopes for consumption.