U.S. Cotton Outlook
The first U.S. estimates for 2001/02 reflect higher production, exports, and ending stocks. Production is projected at 18.8 million bales, based on USDAs Prospective Plantings and average abandonment and yields. Domestic mill use is projected at 9.0 million bales, down slightly from 2000/01 as competition from textile imports more than offsets growth in retail demand. U.S. cotton exports are projected at 9.0 million bales, the largest since 1994/95. Exports are expected to benefit from a modest recovery in world consumption, large exportable supplies in the United States, and strong pre-season sales. Despite larger exports, stocks are expected to rise to a burdensome 6.3-million bales, or 35 percent of total use.
Lower disappearance and higher ending stocks again characterize the 2000/01 estimates. Production and imports are unchanged. Domestic mill use is reduced 100,000 bales to 9.2 million based on recent consumption data and continuing indications of a decline in consumer demand. U.S. exports are reduced this month by 500,000 bales to 6.4 million, as weekly export shipments have not kept pace with export commitments, indicating likely deferral or cancellation of export sales. Ending stocks are increased 700,000 bales to 5.5 million bales, the highest since 1988/89.
World Cotton Outlook
World production for 2001/02 is forecast at 93 million bales, up 6.6 percent, or 5.8 million bales (480 lb), from 2000/01. Based on increased planted area and higher average yield and abandonment rates, U.S. production is forecast up 1.6 million bales to 18.8 million. Total foreign production is up 4 million bales to 74.2 million. World consumption is forecast at 93 million bales, an increase of 1.4 percent from 2000/01. With production forecasts equal to consumption, ending stocks, after falling for two years, are forecast unchanged at 37.1 million bales. Total exports are forecast at 27.7 million bales, up 6.5 percent from 2000/01.
This month's 2000/01 estimate has lower production and trade and slightly higher consumption. Production is decreased by 100,000 bales in Australia and 200,000 bales in Pakistan. Consumption is up slightly with a 500,000-bale increase in China largely offset by decreases in Mexico, the U.S., Russia and small decreases in several other countries.
The 1999/2000 season is largely unchanged. Several minor historical adjustments were made to North Korea, Mexico, and several FSU countries reflecting new trade and consumption information for those countries.
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 European ports. During April, quotes from Syria, Uzbekistan, African Franc Zone, Greece, and Paraguay were included in the index. The index averaged 51.16 cents per pound during the period, a 0.40-cent decrease from Marchs 51.51 cents per pound average. The African Franc Zone quote was the lowest in the index during the four-week period, averaging 48.24 cents per pound.
Futures Prices: Nearby May 2001 futures prices in April averaged 45.37 cents per pound, down 5.33 cents from 50.70 cents per pound in March. The July 2001 contract averaged 47.19 cents per pound, a decrease of 4.54 cents from the previous month.
U.S. COTTON HIGHLIGHTS
Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in March was 33,728 (480-lb.) bales, compared with Februarys level of 33,162. A total of 873,994 bales were consumed during the five weeks in March, compared with 680,464 in the four weeks of February. The seasonally adjusted annualized consumption rate for the month of March was 8.80 million bales, up from February=s 8.66 million.
Domestic mills: Most mills have been conservative in making 2001-crop cotton decisions due to uncertain economic conditions. Mills have started to inquire about January through September deliveries for new crop cotton. Some domestic mills continued to cancel and delay May through July deliveries of old crop cotton. Mills continued to operate on various schedules due to high inventories of finished goods. Demand was light for weaving and knitting yarns. Demand for denim increased slightly.
Cotton Stocks: U.S. cotton stocks on hand in consuming establishments at the end of March were 479,520 bales (480-lb), up from 462,937 in February. Stocks held in public storage and compresses in March totaled 9.3 million bales, down from 10.6 million in February. Active spindles in March totaled 3.7 million, of which 2 million were dedicated to 100 percent cotton, compared with 4.4 million for the same time last year, with 2.4 million dedicated to 100 percent cotton. Cotton=s share on the cotton spindle system was 78 percent.
U.S. cotton exports in February 2001 totaled 614,000 (480-lb.) bales, 50,000 bales above January 2001 exports of 564,000 and 122,000 bales below February 2000 exports of 736,000 bales, according to the U.S. Bureau of the Census. The leading markets in February were Mexico, Indonesia, Hong Kong, Taiwan, Turkey and Japan.
U.S. cotton imports in February were zero. Imports for the same month last year were 8,900 bales.