CHINA: LATE JUNE RAINFALL IMPROVES SUMMER CROP CONDITIONS
Warm, dry weather in early June aided summer crop planting on the North China Plain. Later in the month, widespread showers and near-normal temperatures increased topsoil moisture for germination and vegetative growth. Most of Hebei Province remained drier than normal through early July, but soil moisture levels were adequate in Shandong and Henan Provinces. In the western part of the North China Plain, unusually heavy rain in June and July led to flood warnings along the upper and middle reaches of the Yellow River. Moderate rainfall in Manchuria during June benefitted corn, soybeans, and spring wheat development. Heavy showers in the lower Yangtze River Valley caused local flooding in June and disrupted early rice harvesting and late rice transplanting, but drier weather in July favored flood recovery efforts. Scattered showers were reported in the southern provinces, where more rain is needed for rice development.
NORTH KOREA: BELOW NORMAL RAINFALL CAUSE SUMMER CROP WORRIES
Early spring rainfall was erratic in North Korea, but widespread near-normal rainfall during May raised hopes for favorable germination and emergence of summer crops. The weather in June was unfavorably warm and dry with rainfall only 20 to 50 percent of normal across the country; the driest region being the northeast and southwest. Temperatures were generally 2 to 5 C. above normal for the month. Early July rainfall brought relief to stressed summer crops in the eastern half of the country. The far northeastern portion of the country remained dy. According to the North Korean Government, water shortages are causing problems for rice paddies, and nearly all corn seedlings have been stressed by the warm and dry weather.
CANADA: WET AND COOL WEATHER DELAYS CROP GROWTH IN THE PRAIRIES
During May 1999, most spring grain and oilseed areas of the Canadian Prairie Provinces experienced planting delays due to cool, wet weather, especially in the first half of the month. Planting was eventually completed in western and northern crop areas by month's end, but sections of southeastern Saskatchewan and southwestern Manitoba remained prohibitively wet through early June, the end of the optimal planting period. During June 1999, cool and wet weather continued to hamper crop growth and field work across the Canadian Prairie Provinces with some exceptions. During the week of June 20 - 26, in the eastern Prairies, warmer weather aided crop development, especially in Manitoba. Unfortunately, moderate showers slowed replanting efforts and recovery from excessive soil moisture. From June 27 through July 5, rainfall tapered off across the Prairies, with just a few locations reporting rainfall in excess of 25 millimeters. Despite the presence of showery weather, periods of dryness during the week allowed fieldwork to resume. This included spraying for weeds and pests and treatment for disease, activities that had been interrupted by the chronic wetness. Again, unusually cool weather further delayed development of late-planted grains and oilseeds. Although warmer weather is needed across the Prairies to help evaluate growth rates, excessive heat would be unfavorable for crops, which typically advance through reproduction in July.
TURKEY: WHEAT AND BARLEY CROPS REDUCED BY DROUGHT
According to the U.S. agriculture counselor and FAS analyst that recently returned from crop travel, the 1999/2000 wheat production is forecast at 16.5 million tons, down 1.0 million tons this month, while the barley crop is lowered 0.4 million tons to 7.0 million. Unfavorable dry weather from late-April through June across southeast Anatolia and sunni bug damage reduced wheat and barley yield prospects. Around 10 percent of the country's both wheat and barley production is produced in the southeast region. Southeast Anatolia produces significant quantities of durum wheat. Crops in the northern and western parts of Turkey are reported to be normal.
IRAN AND IRAQ: WHEAT AND BARLEY CROPS REDUCED BY DROUGHT
Wheat and barley production are lowered this month due to an extended dry period that lasted most of the season. In Iran, wheat production for 1999/2000 is projected at 8.5 million tons, down 1.0 million from last month and down nearly 30 percent from last season. Barley is projected at 1.6 million, down 0.2 million from last month and down 30 percent from last year. In northwest Iran, cumulative rainfall was 70 percent below normal from December1 to June 2; in the southern growing areas of Kerman, 57 percent below normal; and in the eastern region of Kordestan, rainfall was 75 percent below normal. For Iraq, wheat production is lowered 0.2 million tons from last month to 0.8 million, versus a 1.3 million ton crop last season. Barley is forecast to decline 0.2 million tons to 0.8 million and down 50 percent from last year . The same dry weather pattern that affected crops in Southeast Turkey, Syria, and Iran also negatively impacted Iraq's crops. No weather station data is received from Iraq.
CHINA: CORN PRODUCTION FORECAST AT A RECORD LEVEL
China's corn production for 1999/2000 is estimated at a record 132.0 million tons, up 2.0 million or 2 percent from last month and up 6 percent from last year. Area is estimated slightly higher this month at 25.3 million hectares based on an upward revision of last year's area, while yield is virtually unchanged from last month at 5.22 tons per hectare. Chinese officials reported that area is expected to decline slightly in the Northeast and northern China because low prices have reduced farmers' profits and "dampened enthusiasm" for corn production. However, corn area may increase in southern provinces as farmers shift from early rice to corn in response to government policies that encourage the production of higher-quality grain. Rainfall and temperatures have been mostly favorable for early corn in southern China, but recent heavy rain in central China may have caused some flood losses. The weather has been generally favorable for vegetative corn in the Northeast and northern China, although dry conditions have stressed the crop in the northern and western parts of the North China Plain.
CANADA: BARLEY AND OATS FORECASTS RISE
Canada's barley production forecast for 1999/2000 rose 3 percent from last month to 12.5 million tons, but is still slightly below last year's level. Yield is increased due to favorable weather in Alberta. Oat production rose 3 percent from last month to a forecast 3.6 million tons due to a slight increase in planted area; however, production is down 9 percent from last year. Barley and oats are mainly grown in the provinces of Alberta and Saskatchewan, but area is down sharply from 1998/99 due in part to heavy spring rains and low temperatures that caused excessive wetness during planting time in Saskatchewan. Standing water reported in many fields in the southeastern part of Saskatchewan. Canada succeeded in planting more oats than projected in last month's forecast due to producers seeding some areas usually considered too dry for crops and planting oats in fields usually reserved for wheat.
RUSSIA: COARSE GRAINS REDUCED BY DROUGHT
For the second consecutive month, the Russian grain crop suffered from extreme weather. The sub-freezing temperatures that damaged winter wheat and spring barley in early May were followed by persistent dryness with occasional scorching temperatures during June. The drought was centered in the lower Volga Valley and adjacent regions, but was neither as extensive nor as severe as last year's drought. Coarse grains output is forecast at 23.7 million tons, down 2.5 million from last month (19.0 million last year); barley is reduced from 13.5 to 12.0 million (9.8 million last year); rye from 5.0 to 4.5 million (3.3 million last year); and oats from 5.5 to 5.0 million (4.6 million last year).
INDIA: OILSEEDS FORECAST HIGHER
India oilseed production for 1999/2000 is forecast at 26.8 million tons, up 1.05 million tons, or 4 percent from last year. Despite this year's lower prices, production of soybeans is forecast to increase 2 percent to 6.1 million tons as farmers in Rajasthan and Maharashtra are expected to shift area from less profitable coarse grains to soybeans. Peanut production in 1999/2000 is forecast to increase 8 percent to 8.0 million tons after last year's crop was diminished by unfavorable weather in peanut growing regions. Sunflowerseed production is forecast to increase 8 percent to 1.3 million tons in response to strong domestic demand for sunflowerseed oil. Rapeseed and cottonseed are also expected to increase, 3 percent and 2 percent to 6.0 and 5.4 million tons, respectively.
ARGENTINA: SOYBEAN AND SUNFLOWERSEED PRODUCTION DOWN
Argentina's 1999/2000 soybean production and sunflowerseed production are forecast to decrease from last season. Soybean production is forecast at 17.0 million tons, down 1.3 million or 7 percent from last year. Sunflowerseed production is forecast at 6.4 million tons, down 0.2 million or 3 percent from last year's record. Declining oilseed prices and large supplies will reduce the incentive to plant later this year.
High production last year and competition from other nations are anticipated to weaken the oilseeds market. Argentina and Brazil's 1998/99 soybean production are estimated at near-record levels. A record 1999/2000 soybean crop is estimated for the United States, and bumper sunflowerseed crops are forecast for the United States and Russia. Global palm oil production is projected at a record level and will provide competition for sunflower and other vegetable oils.
Record areas of soybeans and sunflowers had been planted last season in anticipation of higher returns for oilseeds compared to other crops. With oilseed prices down, farmers are expected to shift area back to wheat or other higher-return crops. Harvested area for sunflowerseed is forecast at 3.45 million hectares, down 0.3 million or 8 percent from the previous year. Soybean harvested area is forecast at 7.25 million hectares, down 0.25 million hectares or 3 percent from last year. It is expected that as area for single-crop soybeans is reduced in favor of wheat, area for lower-yielding second-crop soybeans will be expanded. Soybean yield may be affected by a reduced level of inputs as credit becomes more difficult to obtain due to lower oilseed price expectations.
FEATURE COMMODITY ARTICLES
WORLD WHEAT SITUATION FOR 1999/2000
World wheat production for 1999/2000 is forecast at 575.4 million tons, down 12.6 million or 2 percent from last season and well below the 1997/98 record crop of 609.9 million. Harvested area is forecast at 219.7 million hectares, down 2 percent from 1998/99. The average yield is forecast at 2.62 tons per hectare, virtually unchanged from last year. The United States, European Union, Canada, Eastern Europe, Ukraine, and Northwest Africa are forecast to produce less wheat this year versus last year. China, Australia, and Argentina are forecast to produce more wheat than 1998/99, while India is forecast to produce a record wheat crop. (See table 3 of this circular for area, yield, and production for individual countries and regions.)
United States: Wheat production in the United States for 1999/2000 is forecast at 63.5 million tons, down 5.9 million or 9 percent from last year. Harvested area is forecast at 22.1 million hectares, down 1.8 million or 7 percent from the previous season and the lowest since 1988/89. The average farm price received by farmers for 1999/2000 is projected in the $2.45 to $2.95 per bushel range, compared to $2.65 for the 1998/99 crop and $3.38 for 1997/98. Yield is forecast at 2.87 tons per hectare, down only 1 percent from last year's record level. Winter wheat production is estimated at 45.5 million tons, down 11 percent from last year due to a drop in harvested area. Yield is up slightly to a record level. Durum wheat harvested area is forecast 9 percent higher than 1998/99 at more than 1.6 million hectares, while other spring wheat harvested area is forecast down 1 percent from last year at 6.1 million hectares. The increase in durum is attributed to an attractive crop revenue coverage insurance program for durum wheat, while the decrease in winter and other spring wheat is mainly due to depressed prices, poor weather, and producers switching to alternative crops. Durum production is forecast at 3.6 million tons, down 6 percent from last year, but up 22 percent from the 5-year average. According to the National Agricultural Statistics Service (NASS) Crop Progress Report, winter wheat harvest activity in the 19 major producing states had reached 70 percent completion by July 11. This slightly trailed last year's rapid harvest but was 4 points above the 5-year average. Also, NASS reported that 68 percent of the spring wheat was in excellent to good condition; 26 percent fair; and 6 percent poor to very poor in the 5 major producing spring wheat states. During the same period last year, 67 percent of the spring wheat was in excellent to good condition; 26 percent fair; and 7 percent poor to very poor.
Canada: Wheat production in Canada for 1999/2000 is forecast at 23.5 million tons, down about 4 percent from last year's crop. Heavy spring rains and low temperatures in the prairie provinces caused excessive wetness during planting time, with standing water reported in many fields in southeastern Saskatchewan and southwestern Manitoba. In many places, fields were too wet for growers to plant wheat in time for plant maturation prior to normal fall killing frosts, causing a reduction in the forecast harvested area to 10.3 million hectares, down 4 percent from 1998/99. According to Statistics Canada, durum plantings fell 38 percent from last season to 1.8 million hectares following low international demand, high stocks, and the comparatively long growing season required by durum. Total-wheat yield prospects are forecast slightly above the average level at 2.28 tons per hectare. The provincial governments of Saskatchewan and Manitoba extended the cut-off date for crop insurance on wheat, which means that some of the wheat crop will run a significant risk of being damaged by frost before it can be harvested. Although heavy rains interfered with sowing fields uniformly in some areas, the other parts of the Prairie Provinces are receiving more than sufficient moisture for grain development. Many areas that are not normally planted because they are too dry have been sown this year to partially make up for area lost in fields with standing water. The high moisture levels are causing greater than normal weed growth which may reduce yield. In Ontario, where most of Canada's winter wheat is grown, area is forecast to remain nearly the same as last year at 287,000 hectares. Crop development has been generally favorable. Winter wheat production comprises about 5 percent of total wheat.
European Union (EU-15): Production in the EU-15 for 1999/2000 is forecast at 97.6 million tons, down 6.1 million or 6 percent from 1998/99. Yield is projected at 5.76 tons per hectare, a decrease of 5 percent from last year's record level. Harvested area is forecast at 16.9 million hectares, down slightly from last season due in part to increased set-aside requirements. Spain's harvest is estimated to be down 21 percent from last year at 4.2 million tons. A drought caused the lowest rainfall in the past 50 years, affecting the southern Spain most severely in the region where most of their durum crop is grown. In France, the wheat crop is forecast at 38.5 million tons, slightly below the 1998/99 record level of 40.2 million. Wheat area is a near record 5.2 million hectares and favorable precipitation has been beneficial for the crops. Production in the United Kingdom is forecast down 6 percent from last year to 14.5 million tons, as the higher set-aside and wet fall dropped area 7 percent. Yield is forecast at a bumper 7.63 tons per hectare due to excellent late-season growing conditions. In Germany, crop conditions have been good with production forecast at 19.5 million tons, down 3 percent from the 1998/99 record of 20.2 million tons. A slight decline in harvested area to 2.7 million hectares more than offset forecast bumper yields of 7.22 tons per hectare.
Eastern Europe: For 1999/2000, Eastern Europe is forecast to produce 28.4 million tons of wheat, down 5.7 million or 17 percent from last year. Harvested area is forecast at 8.1 million hectares, down 1.5 million or 16 percent from last season. Farmers planted less area because of the combined effects of poor weather, low prices, lack of payment, and an increase in production costs. In Poland, production is forecasted at 9.0 million tons, down 6 percent from 1998/99, with area of 2.6 million hectares down marginally. The weather has remained generally favorable throughout the season, and yield is projected slightly above average at 3.50 tons per hectare. In the Czech Republic, wheat is forecast to decrease to 3.7 million tons, a 10 percent drop in production and harvested area is forecast to decline to 0.8 million hectares. Crop conditions are favorable to-date. Bulgaria's wheat production is forecast to fall to 2.7 million tons, down 0.6 million due to lower area. Bulgaria recorded its wettest fall in 49 years causing planting delays; however, favorable winter and spring weather benefitted crop development and an above average yield is forecast. In Romania, excessive rains during late Fall reduced planted wheat area, and harvested area is down 20 percent to 1.6 million hectares. With slightly above average yields, production is forecast to drop 0.7 million tons to 4.5 million. Hungary is expected to produce 3.0 million tons on 0.7 million hectares, which compares to last year's 5.0 million tons and 1.1 million hectares. Excessive rain reduced wheat area; however, favorable weather in the Spring supports a near average yield. Additionally, excessive rainfall (200 mm) during the last two weeks of June in Romania and Hungary has potentially lowered wheat quality in both countries. In the former Yugoslavia, wheat production is forecast to fall 27 percent from last season to 3.5 million tons. Harvested area is projected to fall 23 percent to1.0 million hectares. In Serbia, area is lower as a result of farmer's reaction to reduced income generated from last year's crop, while in Croatia, the government announcement of wheat prices and subsidy cuts came just prior to sowing and disrupted farmers planning intentions. Weather has been generally favorable for crop development throughout former Yugoslavia, but with reduced inputs and a shortage of fuel, yield is forecast to decline 4 percent from last year to 3.50 tons per hectare.
Australia: Wheat production in Australia during 1999/2000 is forecast at 22.5 million tons, up 1.5 million tons or 7 percent from the 1998/99. Harvested area is forecast at 12.0 million hectares, up 4 percent from last year due to better returns relative to other crops and an ongoing but gradual shift from sheep to field crops. Yield estimated at 1.88 tons per hectare, is 4 percent above last season and 6 percent higher than the 5-year average. Higher area and yield are forecast with the widespread rain across the winter major grain regions during June providing a good start to the growing season.
India: Wheat production in India during 1999/2000 is forecast at a record 71.5 million tons, up 5.6 million or 8 percent from last season. The previous record was 69.3 million tons produced in 1997/98. The forecast harvested area of 26.8 million hectares is 1 percent above last year. Yield is estimated at a robust 2.67 tons per hectare, up 8 percent from 1998/99. The northern India grain belt enjoyed below normal temperatures and plentiful sunshine during February-March, beneficial for grain development. Rainfall amounts and irrigation supplies were adequate during critical growth stages. Phosphatic fertilizer applications were greater than a year ago, despite some temporary shortages. However, minor weed problems proved difficult of control this season, possibly due to low quality herbicides. Hot, dry weather at harvest minimized losses, leaving grain in good condition for storage.
Argentina: Wheat production in Argentina for 1999/2000 is forecast at 12.0 million tons, up 1.3 million or 12 percent from last year's crop. Yield is projected at 2.31 tons per hectare, or 3 percent above last season's level. Harvested area is estimated at 5.2 million hectares, up 9 percent from 1998/99, concurring with a July 2 Argentine Government forecast that placed planting intentions up by about 9 percent. The lower market potential for oilseeds is providing incentive to return area to wheat that had been shifted to soybean and sunflower in the previous season. Wheat offers the best profit potential for farmers due to its relatively lower production cost and the option of being able to follow with a second crop of soybeans. Planting is progressing well due to an increased use of direct seeding methods. The July 2 report indicated that 60 percent of the intended planting area had been seeded, compared to 51 percent at the same time last season. Harvesting begins in late-November in the northern regions and proceeds south through January.
China: Wheat production in China for 1999/2000 is forecast at 112.0 million tons, up 2.0 million from last year. Area is forecast at 28.9 million hectares, unchanged from last year, while yield is projected 2 percent higher at 3.76 tons per hectare. The winter wheat crop was impacted by a serious drought on the North China Plain which caused planting delays and reduced tillering, but timely rainfall in April and May during the critical pollination stage improved yield prospects. Also, dry and warm weather in June favored maturation and harvest, which was completed by early July. Winter wheat production is estimated larger than last year's crop that was affected by excessive moisture at harvest.
Spring wheat area is forecast to be lower than last year, reflecting government policy that emphasizes the production of higher-quality grain. Planting was delayed in parts of Manchuria and Inner Mongolia by cool spring weather, but current conditions are mostly favorable for vegetative growth. Spring wheat production is expected to be lower than last year due to decreased area and a decline from last year's record yield. Heading occurred in June and harvesting will start in late July and continue through August.
Russia: Wheat production in Russia for 1999/2000 is estimated at 31.5 million tons, up 4.6 million or 17 percent from last year. Wheat area is estimated at 25.0 million hectares, down 1.0 million or 4 percent from last year. Although output is forecast to surpass last year's harvest -- which was the lowest in over 40 years -- early-season prospects for above-average yields have faded. Winter grains were planted last fall under extremely dry conditions, resulting in low germination and poor establishment. According to official reports, winterkill losses totaled 20 percent this year compared to 13 percent last year. Surviving plants were subjected to two episodes of sub-freezing temperatures in May, followed in June by persistent dryness punctuated by a brief bout of extremely high temperatures. Scattered showers and cooler temperatures arrived toward the end of June -- too late to benefit winter grains in the lower Volga Valley and surrounding regions. Yield will also be hampered by continuing reduced application of fertilizers and plant-protection chemicals and shortages of fuel and operational machinery. In contrast to the declining winter-grain prospects in European Russia, the early-season outlook for spring wheat in Western Siberia is generally favorable.
Ukraine: Wheat production in Ukraine for 1999/2000 is estimated at 14.0 million tons, down 0.9 million or 6 percent from last year. Wheat area is estimated at 5.7 million hectares, up 0.1 million or 2 percent from last year. Crops in eastern and central Ukraine have suffered from the same weather events which negatively affected yield potential in southern Russia. According to reports from USDA personnel in Kiev, the cold weather in early May caused significant damage to winter wheat. The hot, dry conditions which began in May were partially alleviated by widely scattered thundershowers in late June, but not all drought-affected areas received sufficient rain to reverse the impact of the drought. The reports also indicate that weed infestation is a major problem this year and that insect damage poses a threat to grain quality.
Kazakstan: Wheat production in Kazakstan for 1999/2000 is forecast at 7.0 million tons, up 2.3 million or 49 percent from last year. Wheat area is estimated at 9.5 million hectares, up 0.4 million or 4 percent from last year. The production outlook has improved since last month, following above-normal precipitation during June, and estimated yield is above the average of the past five years. Although wheat area increased slightly this year, area has dropped 25 percent since 1993.
Algeria: Wheat production in Algeria for 1999/2000 is forecast at 2.2 million tons, virtually unchanged from the 1998/99 crop. Harvested area is also similar to last year at 2.0 million hectares. A dry start to the season ended in mid-November with soaking rains. These rains provided generous moisture for winter grain planting. During March and April, dryness hampered western Algeria, while eastern Algeria received occasional light showers. The continued late season heat and dryness prevailed in the west diminishing crop prospects, while periodic showers in the central and eastern areas provided adequate crop moisture. Yield is forecast at 1.10 tons per hectare, the second highest level after 1.31 tons in 1996/97.
Morocco: Wheat production in Morocco for 1999/2000 is forecast at 2.0 million tons, down 2.4 million or 54 percent from the 1998/99 crop. Harvested area is forecast at 2.7 million hectares, down 13 percent from last season. Farmers typically wait until the Fall rains arrive to begin planting winter wheat. This rainfall can arrive as early as September, but last year it did not start until early December. Many fields were planted late, and an unusually cold winter delayed crop development. A wet January boosted topsoil moisture and soaking rains fell through February and early March. However, from mid-March until the end of the growing season, an extended dry period diminished yield prospects. Yield is forecast at 0.74 tons per hectare compared to last season's 1.42 tons.
Tunisia: Wheat output in Tunisia for 1999/2000 is forecast at 1.5 million tons, up 11 percent from last season's crop of 1.4 million tons. Harvested area is forecast similar to last year, just slightly above 0.9 million hectares. A slow start to the rainy season was followed by consistent rains in mid-November which gave farmers ample moisture for winter grain planting. Persistent dry weather from mid-February through mid-March was followed by beneficial rains during the crop's heading stage. Yield is forecast at 1.65 tons per hectare, up 10 percent from last season.
World Wheat: Area, Yield, and Production
Timothy Rocke, Foreign Grains
Telephone: (202) 720-1572
Bryan Purcell, Northwest Africa
and Eastern Europe Analyst
Telephone: (202) 690-0138
Maria Anulacion, Argentina
Telephone: (202) 690-0139
Jim Crutchfield, India and
Telephone: (202) 690-0135
Paulette Sandene, China Analyst
Telephone: (202) 690-0133
Mark Lindeman, FSU Analyst
Telephone: (202) 690-0143
Suzanne Miller, EU-15 and Canada
Telephone: (202) 720-0882
INDICATIONS FOR 1999/2000 WORLD COTTON PRODUCTION
World cotton area and production for the 1999/2000 season depend on several factors with cotton prices and those of competing crops playing a crucial role. Cotton production is also influenced by domestic and world financial conditions, government policies, and weather.
The Cotlook A-Index represents the price level of international raw cotton offered to the market on a daily basis from several cotton trading countries. Generally, a direct relationship exists between cotton area and production, and price indexes for the previous year. This relationship is shown in the price production chart. Using this index as a reflection of world cotton prices, the chart shows that the average annual Cotlook A-Index has dropped for the past four years from the most recent peak of 91.4 cents per pound of lint in 1994/95. Since August of 1998, the index has dropped nearly 10 cents per pound with this June's price 11 cents below that of June 1998. As the chart shows, production movements have generally followed price. The 1999/2000 projected of 89.2 million bales, 4.9 million higher than the 84.4 million estimated for 1998/99, contradicts this trend. However, production levels depend also upon the price level of other crops in relation to the price of cotton, production costs associated with cotton production, production difficulties at the onset and during the growing season, and government policies. For 1999/2000, the increase in cotton production appears to be driven by weak prices for alternative crops in the United State and to a smaller extent, in foreign countries. The following country paragraphs highlight the major producers and indicate the environment under which cotton cultivation began and the direction of production for 1999/2000.
United States: Production for 1999/2000 is estimated at 18.7 million bales, up 4.8 million from last year's weather-reduced crop. The 1999/2000 production forecast is based on 14.6 million acres planted, as reported in the June 30 Acreage report, combined with average abandonment rates and trend yields. In contrast to 1998/99, cotton area is larger and yield potential is higher because of the favorable weather in the high plains of Texas and Southern California during planting and continuing into the early crop development stages. As of July 4, cotton squaring was at 66 percent and cotton boll setting was at 16 percent. Both stages were 3 percentage points behind the 5-year average. About 60 percent of the crop was rated either "good" or 'excellent."
China: Cotton production for MY 1999/2000 is forecast to fall by 1.2 million bales to 19.5 million, reflecting the negative effects of a lower procurement price and government efforts to reduce cotton area. Production in the western province of Xinjiang is expected to remain stable, though profits are declining. However, producers could face insect infestation as this past warm winter may result in a serious cotton bollworm outbreak, as well as, continuing problems with cotton aphids. The problem appears to be more serious in southern Xinjiang, where many large state farms are located. If this situation does occur then production in this area will be lower than expected. In the Yangtze River valley, production is expected to fall significantly, as farmers have dropped area from 20 to 25 percent from last year because of the lower cotton price as marginal cotton land is switched into other cash crop such as pepper, fruits, and oilseeds. Cotton yields are expected to improve as low-yielding land is taken out of production.
India: Assuming a normal monsoon, 1999/2000 cotton production is forecast to decline marginally to 12.7 million bales due to a projected small decrease in area to 9.0 million hectares. Planting intentions are largely influenced by the price relationship with competing crops such as paddy, and fodder crops in the north; coarse grains, pulses, sugarcane in central India; and paddy, tobacco, chillies in the south. Since this year's cotton prices and returns were comparatively higher than for other crops, 1999/2000 cotton area is projected to remain stable, except for the north where farmers are expected to reduce area by 10 to 15 per cent due to heavy losses in the past two seasons. These reductions are expected to be partially offset by gains in other cotton areas, especially in the central cotton zone. While quality seed shortages have been reported, supplies of most inputs are expected to be adequate this year.
Pakistan: Cotton production for 1999/2000 is estimated at 7.0 million bales, 0.7 million above last year's weather and insect reduced crop. Area is expected to increase marginally and yields are also expected to improve slightly in Punjab and Sindh, mainly due to the increased availability of better quality seeds. Planting conditions have been generally favorable through June. Farmers are reporting the adequate availability of inputs, including seed, fertilizer and irrigation water. Thus far, little of the early Sindh crop has required replanting and planting operations are nearing completion in the Punjab. About 80 percent of the crop is grown in the Punjab and the balance in the Sindh.
Turkey: Cotton for the outyear is estimated at 3.8 million, down slightly from last year, due mainly to farmers dissatisfaction with cotton returns. Weather conditions in the Aegean region also appear to have adversely affected production. In some areas, dry weather affected seed germination or excessive rainfall required replanting which will make the crop more dependent on rainfall conditions through October. Given the slow pace of expansion of irrigation infrastructure in the Southeastern Anatolian Project, increases in cotton area are expected to just offset declining cotton area in traditional growing areas. Currently, the major shift from cotton production is occurring in Cukurova, where farmers are shifting to a wheat-corn rotation or to horticultural production.
Australia: Production for 1999/2000 is forecast at 3.2 million bales, up 0.1 million from last year. This assumes average seasonal conditions and adequate water supply. The production increase comes despite an expected 9 percent decrease in cotton area. The vast majority of area reduction will be in dryland cotton. Last year, dryland area expanded to record levels because of the unusual high level of rainfall during the months of July through September and better than average cotton prices. However, the 1999/2000 dryland area is expected to return to a more average level as rainfall so far this season is below that of last year and prices are lower. Past irrigation water shortages have encouraged farmers to improve dryland agronomic practices and cotton varieties. Farmers are likely to use these new varieties and practices to increase the yield of their dryland cotton.
Argentina: Production for 1999/2000 is forecast at 1.0 million bales, equaling last year's weather-reduced crop. Although, projection for the 1999/2000 crop is early, most estimations vary between 500-700,000 hectares planted for the outyear. There are many uncertainties as a consequence of three bad crops in a row which have left the local cotton complex financially weak. Many producers are expected to shift to cheaper and safer alternatives such as sunflower and corn, while a few others, especially some large producers, are reported to have land for sale. Merchants, who normally finance a large portion of the production cost for new crops, have restricted their financial support. Some gins have not operated this season because of this year's poor crop and slow harvest. As result of the difficult economic situation, some provincial governments have announced that they will support small and medium producers by providing monetary support to help them overcome the current situation. This kind of support might increase in the next couple of months as this year is a general election year. Availability of support will have a strong influence on the total 1999 production.
Brazil: Cotton for MY 1999/2000 is forecast at 2.1 million bales, up 0.1 million from last year, due to a potential increase in area as producers respond to good cotton yields this season and fair domestic prices, vis-a-vis, soybeans, corn and sugarcane. Timely marketing of the current crop will also add support, for higher sown area this August-September period. The Center-West is likely to continue increasing area planted to cotton, especially in the state of Mato Grosso which currently has excellent yields and crop quality. Production increases in the Center-West are expected to more than offset anticipated area reduction in the cotton states of Goias and Parana.
Egypt: Total cotton production for 1999/2000 is estimated at 1.0 million bales, down slightly from last year. This decline is mainly due to farmers reluctance to plant cotton following the disappointing returns from the 1998/99 crop. The average return was low due to three reasons. The average price farmers received for cotton was about 24 percent lower than in MY 1997/98. Second, the average yield declined significantly because of the reduced use of pesticides cause by the elimination of the government pesticide subsidy. Land cost increased following the government's implementation of the new land reform law which allows land owners to set their rents at market prices instead of government controlled rents. These conditions are expected to continue for the 1999/2000 production year.
Mexico: Mexico's cotton production for 1999/2000 is expected to fall to approximately 650,000 bales, down 35 percent from last year. Since the Mexican Government's support and world prices are low, producers are having difficulty financing their crops. This coupled with the current dry weather in some parts of the north have hampered planting operations. This is particularly true for producers in Sonora, where the forecast for planted area has been reduced from 49,000 hectares in 1998/99 to 29,000 hectares for the crop now being planted. Sonora, which is entirely irrigated, is traditionally one of the most important cotton producing states for the spring/summer crop cycle. The lack of rain in the state during the past year has significantly reduced reservoir levels. Some of Sonora's reservoir levels are only 14 percent of capacity, 34 percent lower than this time last year. If they are drawn down much further, the Water Commission of Mexico could restrict water for irrigation, lowering water available for cotton with the likely result of lower yields.
Also, cotton area in the Mexicali (second largest producing state) is expected to decrease to 40,000 hectares against 55,000 last year. This decrease is due to dry weather, and general uncertainty in the markets. Preliminary planting figures in other areas, namely Sinaloa, Torreon, Delicias, and Tamaulipas, have turned out to be lower than expected because of growers' general pessimistic outlook. Reportedly, farmers are finding corn and sorghum more profitable than cotton.
Uzbekistan: Production is forecast at 5.3 million bales, up 0.3 from last year due to favorable weather pattern during the early month of the growing season. The cotton crop was helped by an unusually warm June which often increases potential yield. This should offset the negative effects of a heavy rain in late April which caused almost one-third of the sown cotton area to be replanted. On the average, 10 percent of sown area is replanted each year. Similar to this year, an estimated 25-30 percent of the crop was replanted in 1997 following heavy rain and hail in early May. Temperature data is a useful early-season indicator of cotton yields in Uzbekistan. Typically, the crop is strengthened by warm June temperatures as it moves into its reproductive stage in July. June temperatures in 1999 matched the temperatures observed in 1997, when final lint yield was 767 kilograms per hectare, slightly lower than this year's estimated yield of 769 kilograms.
Ronald R. Roberson, Cotton
Phone: (202) 720-0879