World cotton stocks have grown considerably as a result of the recent record cotton prices that encouraged area increases in 2010 and 2011 and subsequently led to large crops.  Meanwhile, the higher prices promoted fiber substitution at mills and the slowdown in the global economy reduced demand further, exacerbating the stocks rise. 

The growth in world stocks for the 2011/12 and 2012/13 seasons is largely occurring in China, where purchases for its national reserve program have been extensive and stocks are projected to expand by nearly 20 million bales over the 2-year period.  However, most of this cotton will be unavailable to mills outside of China as demand rebounds. 

U.S. Department of Agriculture (USDA)