Cotton is still the most widely used textile fiber, accounting for more than one half of world fiber consumption after decades of severe competition from man-made substitutes.1 During recent years, remarkable changes have taken place in the world cotton market. Largely as a result of a deliberate change in government policy, in the late 1960s the United States began to maintain smaller carry-over stocks, and cotton prices became more sensitive to changes in output and demand. Consequently, international cotton prices,2 which were quite stable on both a month-to-month and a year-to-year basis during the 1960s (moving within the range of $0.27 to $0.33 a pound with an arithmetic average of $0.29 a pound), began an upward trend as early as 1971. During 1973, prices increased sharply and reached an all-time peak of $0.89 a pound in January 1974. Then the cycle was completed in January 1975 when prices fell to $0.47 a pound. The phase of slowly increasing prices that followed continued throughout 1975, and during December of that year prices averaged $0.59 a pound. Sharp increases occurred during the first seven months of 1976, and by July prices reached a new peak ($0.88 a pound). Cotton prices have stayed close to this peak since then (averaging $0.85 a pound in the second half of 1976 and $0.83 a pound in the first quarter of 1977) because of decreased availability. This occurred in spite of severe competition from the low-priced man-made substitutes.