The 1995/96 world cotton situation is highlighted by continuing relatively high prices despite production considerably in excess of consumption and increasing stocks. While stiff price competition from competing crops will restrict expansion in cotton output in 1996/97, prospects for sustained global economic growth and textile activity bode well for stronger use. On balance, production next season likely will surpass consumption, resulting in further stock rebuilding. Over the next decade, world output and use are projected to continue to grow about 2 percent a year, reaching 105-110 million bales by 2005; trade could reach 31-35 million bales.