U.S. Cotton Outlook

The 1998/99 U.S. outlook this month shows no changes from last month’s estimate.

The 1999/2000 U.S. forecast features higher production and exports, unchanged consumption, and lower ending stocks, compared to last month. The production forecast was increased 344,000 bales to 16.875 million, based on a crop production survey by NASS which showed higher yields in Texas and California. While consumption was unchanged, the export forecast was raised 500,000 bales to 6.2 million, reflecting higher sales in recent weeks. Ending stocks were reduced 100,000 bales to 4.5 million resulting in a stocks-to-use ratio of 27.4 percent.

World Cotton Outlook

The 1998/1999 world outlook this month includes slight increases in production, consumption, trade, and ending stocks. Ending stocks are forecast up 301,000 bales resulting in a world stocks-to-consumption ratio of 49.0 percent.

The 1999/2000 world forecast features slight increases in production, consumption, exports, and ending stocks. The increased production was the result of increases in the United States and India, which were not completely offset by decreases in Argentina and Brazil. Increased imports are forecast for Pakistan and Brazil. Ending stocks decreased 191,000 bales resulting in a world stocks-to-consumption ratio of 46.8 percent.

Cotton Prices

Cotlook A Index: The A-Index, a principal measure of international cotton prices, represents an average of the five lowest quotes of cotton for delivery to Northern Europe ports. During November, quotes of Pakistani, Greek, Uzbekistan, African "Franc Zone," and Syrian cotton were included in the Index. The Index averaged 46.13 cents per pound during the period, a 1.31-cent decrease from October’s 47.44 cents per pound average. The Pakistani quote was the lowest in the Index over the four week period, averaging 44.73 cents per pound. On December 2^nd, the A-Index dropped further to 44.65 cents per pound, the lowest since 1986, as oversupply continues.

Futures Prices: U.S. cotton futures prices represent the current price of U.S. cotton for delivery at a future date. Despite some expectations that the implementation of Step 2 would support the futures market, futures prices continued to drift lower. On Thursday, December 2^nd, the December 99 contract settled at 48.82 cents per pound, and the March 2000 contract at 50.59 cents per pound. Depressed world prices appear to be the major factor affecting futures prices.

U.S. Cotton Highlights

Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in October amounted to 39,606 480-lb bales, compared with September’s level of 38,098 bales. A total of 831,308 bales were consumed during four weeks in October, compared with 985,165 bales in September (5 weeks). The seasonally adjusted annualized consumption rate for the month of October was 10.34 million bales, up from September’s 9.94 million bales.

Domestic mills purchased a light volume of cotton for prompt through fourth quarter 2000 delivery. Demand was good for color 41 and better, leaf 4 and better, staple 34 and longer, and mike 35-49. Some mills were trying to develop different mixes of cotton so that the short staple cotton could be utilized. Others were renegotiating or canceling previously contracted Southeastern and Delta growths, and buying San Joaquin Valley and West Texas growth cotton to replace canceled contracts. Demand for fine and coarse count yarns was moderate. Consumer sales of housewares were good; men’s knitted wear, infant wear, women’s casual apparel, teen apparel and hosiery were moderate; denim sales were light. Mill sales of specialty yarns were moderate; gray cloth was light; domestic denim fabrics and print cloth were very light. Most mills operated on a five- to- six- day work week.

Cotton stocks: U.S. cotton stocks on hand in consuming establishments at the end of October totaled 542,808 bales (480-lb), down from 558,665 bales in September. Stocks held in public storage and at compresses in October totaled 7.93 million bales, up from 4.0 million bales in September. Active spindles in October totaled 4.61 million, of which 2.4 million were dedicated to 100 percent cotton, compared with 5.03 million for the same month last year during which 2.7 million were dedicated to 100 percent cotton. Cotton's share on the cotton spindle system was 78.9 percent in October 1999.

U.S. cotton exports for September 1999 totaled 146,000 480-lb bales, 108,000 bales below August's exports of 254,000 bales and 134,000 bales below September 1998 exports of 280,000 bales, according to the U.S. Bureau of the Census. The leading markets in September 1999 were Mexico, Colombia, Indonesia, Canada and Japan with modest exports to Korea, Bangladesh, Malaysia and Thailand.

U.S. cotton imports in September totaled 10,500 480-lb bales, down 25,200 bales from August when 35,700 bales were imported and 9,900 more than September 1998 imports of 600 bales. The leading supplier in September 1999 was Syria with modest imports from Greece and Egypt.

World Cotton Highlights

Market reports received from U.S. agricultural attaches posted overseas in the last month note increased production forecasts for Uzbekistan and India, and a modest production decline for Tajikistan. An update was provided on China’s production and market reforms. These recent reports are available through the FAS homepage at

United States Dominates World Cotton Exports in MY 1998/99 Despite Losses in Some Key Markets

The United States was the leading exporter of cotton in marketing year1998/99. With exports of 4.3 million 480-lb bales, the United States captured 18 percent of total world exports. Uzbekistan exported 3.8 million bales for a market share of 16.2 percent. Australia exported 3 million bales, a market share of 13 percent, while China’s exports of 675,814 bales, represented 2.9 percent of total world exports.

Despite the U.S. lead in market share, Australia dominated exports to key Asian markets such as Indonesia, Japan, Thailand, Pakistan, and China, and also outpaced the United States in the Italian and Spanish markets. Uzbekistan continued to capture markets in several Eastern European countries such as Russia and Poland, with gains in Brazil, Germany, South Korea and Vietnam. China’s main markets were South Korea, Hong Kong, Indonesia, United States, Taiwan and Thailand, with modest exports to Bolivia and Peru. For more information, contact the author, Pauline Simmons, at (202)720-9510.

MY1998/99 Cotton Import Data for Selected Countries

Five countries, Canada, Japan, Korea, Mexico, and Taiwan purchased nearly 60 percent of U.S. exports in marketing year 98/99. As expected, the United States dominated the Canadian and Mexican markets based on proximity and NAFTA, with GSM-102 a significant factor in Mexico’s purchasing behavior. Taiwan’s imports from Franc-zone African countries exceeded imports from the United States. Australia remained a major competitor with the United States in East Asia. Conversely, Uzbekistan shipped only 14 percent of its exports to these markets, as much of Uzbek cotton was sold to Russia and Europe. For more information, contact the author, Yoonhee Macke, at (202) 720-9513.

Source: Compiled from Attache Reports and each country’s Customs Data.

Last modified: Sunday, March 17, 2013