U.S. Cotton Outlook
The 1999/2000 season outlook is unchanged from last months estimate.
The 2000/01 season outlook has production down 141,000 bales, at 19.16 million bales, with no changes in consumption or trade. This results in a decrease in ending stocks to 4.9 million bales, 26.6 percent of total use.
World Cotton Outlook
The 1999/2000 world outlook features a decline in beginning stocks of 273,000 bales and increases in production of 390,000, consumption of 325,000, and exports of 270,000. The production increase was due to increases for Brazil and Australia. Beginning stocks are reduced due to historical revisions for Syria. Consumption was raised for China and Syria. These revisions noted resulted in ending stocks decreasing 610,000 bales.
The 2000/01 world forecast has lower trade, beginning and ending stocks. World production is virtually unchanged at 87.37 million bales. Increases mainly in Brazil and Australia nearly offset decreases in Turkmenistan, Uzbekistan, Mali, and the United States. Consumption increases in China, Syria, and Taiwan more than offset decreases in Indonesia and others resulting in world consumption being increased by 200,000 bales, to 92.47 million bales. Trade was reduced due to lower demand in importing countries such as Brazil, due to higher production, and Indonesia, due to lower consumption. World ending stocks are down 900,000 bales to 35.15 million bales.
Cotlook A Index: The A-Index, a principal measure of international cotton prices, is an average of the five lowest quotes of cotton for delivery to Northern Europe ports. During July, quotes of Spanish, Greek, Tanzanian, Uzbekistan, and African Franc Zone cotton were included in the Index. The Index averaged 58.38 cents per pound during the period, a 1.16-cent decrease from Junes 59.54 cents per pound average. The African "Franc Zone"quote was the lowest in the Index over the four-week period, averaging 57.25 cents per pound. On Thursday, August 10, the A-Index was 60.90 per pound, an increase of 2.55 cents from last months close of 58.35 cents per pound. The price increase followed New York futures prices, which rose due to hot weather and a lack of rain which withered production prospects for the dryland fields in Texas and the mid-South.
Futures Prices: United States cotton futures prices represent the current price of U.S. cotton for delivery at a future date. Futures prices in July weakened in comparison to Junes prices due partly to anticipated rains for planting in the U.S. cotton belt. On August 10, the October 2000 contract settled at 60.86 cents per pound, an increase 4.76 cents from the previous months average. The December 2000 contract settled at 62.77 cents per pound, an increase of 3.54 cents from the previous month.
U.S. Cotton Highlights
Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in June amounted to 39,600 (480-lb.) bales, compared with Mays level of 38,503 bales. A total of one million bales were consumed during the five weeks in June, compared with 799,000 bales in May (4 weeks). The seasonally adjusted annualized consumption rate for the month of June was 10.3 million bales, up from Mays 10 million bales.
Domestic mills purchased a very light volume of cotton for fourth quarter 2000 to second quarter 2001 delivery. Interest was best for color 41 and better, leaf 4 and better, staple 35 and longer, mike 35-47, strength 26 and higher. Mill inquiries for 2000-crop cotton were light. Interest in ring spun yarns was very good while interest in open-end yarns was moderately good. Demand was very good for fine count yarns and moderate for coarse count yarns. Mill sales of sales yarn, upholstery and industrial fabrics were good; and sales of specialty yarn, greige cloth and domestic denim fabrics were moderate; print cloth was light to moderate. Most mills operated a six-day workweek.
Cotton Stocks: U.S. cotton stocks on hand in consuming establishments at the end of June totaled 499,994 bales (480-lb), up from 487,310 in May. Stocks held in public storage and compresses in June totaled 4.2 million bales, down from 5.4 million bales in May. Active spindles in June totaled 4.43 million, of which 2.43 million were dedicated to 100 percent cotton, compared with 4.72 million for the same month last year, during which 2.52 million were dedicated to 100 percent cotton. Cottons share on the cotton spindle system was 78.4 percent in June.
U.S. cotton exports in May 2000 totaled 659,000 (480-lb.) bales, 49,000 bales below April 2000 exports of 708,000 bales and 403,000 bales above May 1999 exports of 256,000 bales, according to the U.S. Bureau of the Census. The leading markets in May were Mexico, South Korea, and Taiwan, with modest exports to Japan, Indonesia, and the Philippines.
U.S. cotton imports in May 2000 remained unchanged from April's imports of 8,200 (480-lb.) bales, and were 69,000 bales less than May 1999 imports of 77,200 bales. The major supplier in May 2000 was Egypt, with very modest imports from Turkey and Mexico.
A Sharp Decline in Cotton Production for Mali and uncertainty in Cote dIvoire.
By Pauline Simmons
According to CMDT, Malis State Cotton Company, the countrys 2000/2001 cotton output is expected to decline because of low farm-gate prices which have caused farmers who are heavily in debt to turn to more lucrative crops like maize. USDA in August reduced Malis production by 150,000 bales to 800,000 bales. Farmers launched a boycott of planting of the 2000/01 cotton crop in June in protest for government action against low farm-gate prices and for cancellation of their debts. Cotton provides about 40 percent of the countrys export earnings.
According to URECOS-CI, a federation of Ivorian cooperatives which represents 90 percent of cotton growers, low farm-gate prices and a demand by Ivorian farmers to buy the remainder of the former state-owned cotton monopoly, Compagnie Ivorienne Pour Le Development Des Textiles (CIDT), could affect production. CIDT used to be responsible for the purchase of inputs for farmers. According to URECOS-CI, the organization has been trying to buy a part of CIDT since 1998 in order to guarantee reasonable prices for their inputs. CIDT was split into three parts with two parts currently owned by two private sector firms - the Swiss-based Aiglon and the Aga Khan group. URECOS-CI, in partnership with trader Dreyfus International, is also building its own 207,000-bale cotton gin factory which will start operating in 2000/2001.
Mali and Cote dIvoire are the second and third largest African cotton producers after Egypt, and constitute about 44 percent of total Francophone West Africa production. Francophone West Africa is the third largest exporter of cotton in the world after the United States and Central Asia. Most cotton from the sub-region is exported to Europe and Asia.