U.S. Cotton Outlook
This months 2001/02 U.S. projections include higher beginning stocks and lower domestic mill use, resulting in ending stocks of 6.6 million bales, 300,000 bales above last month. Projected production is unchanged at 18.8 million bales. Domestic mill use is reduced 200,000 bales to 8.8 million, as recent mill use rates and additional mill closings have resulted in diminished expectations. The export projection is unchanged at 9.0 million bales.
For 2000/01, U.S. ending stocks are raised 100,000 bales this month as a reduction in mill use is partially offset by an increase in exports. Both of these changes reflect recent activity levels.
The 1999/2000 season is unchanged.
World Cotton Outlook
World 2001/02 estimates reflect higher beginning stocks, larger production, and slightly lower consumption relative to last month. World production is projected higher based on indications of favorable planting progress for the season to date. World consumption is reduced marginally due to a decrease for the United States. With these changes, ending stocks are now projected at 38.4 million bales, up 3 percent from last month.
This month's 2000/01 estimates reflect lower imports and slightly lower consumption and exports. Beginning stocks, production, and ending stocks are increased. Despite a decrease in the production estimate for India of 400,000 bales, production rose by over 700,000 bales due to increases in China and Pakistan (300,000 each) and in Greece, Nigeria, Australia, and Uzbekistan (100-150,000 each). Decreases in consumption in Malaysia, Russia, Germany, Turkey, and the United States are largely offset by increases in Pakistan, India, Hong Kong, Sri Lanka, Thailand, and Colombia. The ending stocks estimate is up by nearly 550,000 bales.
For 1999/2000 and prior years, adjustments were made to several countries data to reflect new information from FAS overseas posts, as well as updated trade information. Changes in historical production for Australia reflect data from the Raw Cotton Marketing Advisory Committee.
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 May, quotes from Syria, Uzbekistan, African Franc Zone, Greece, and Paraguay were included in the index. The index averaged 49.83 cents per pound during the period, a 1.33-cent decrease from Aprils 51.16 cents per pound average. The Paraguayan quote was the lowest in the index during the four-week period, averaging 49.25 cents per pound.
Futures Prices: Nearby July 2001 futures prices in May averaged 44.22 cents per pound, down 2.89 cents per pound in April. The October 2001 contract averaged 46.97 cents per pound, a decrease of 2.67 cents from the previous month.
U.S. COTTON HIGHLIGHTS
Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in April was 31,966 (480-lb.) bales, compared with Marchs level of 33,387. A total of 659,942 bales were consumed during the four weeks in April, compared with 867,539 in the five weeks of March. The seasonally adjusted annualized consumption rate for the month of April was 8.34 million bales, down from March's 8.7 million.
Domestic mills: Domestic mills purchased a very light volume of 2001-crop cotton for September 2001 through March 2002 delivery. Mill purchases of new crop lagged behind normal levels usually seen this time of the year. Some mills delayed new crop purchases due to uncertain production schedules. Mills continued to delay shipments of current crop cotton for July through October delivery. Interest for ring-spun yarn was good, while interest in open-end yarn was light. Demand for fine count yarns was moderate to good and demand for coarse count yarns was light. Sales of domestic denim, greige cloth, upholstery and industrial fabric were light to moderate; mills sales of specialty yarn and sales yarn were very light. Most mills operated a five to six day workweek. Many plants closed for Memorial day.
Cotton Stocks: U.S. cotton stocks on hand in consuming establishments at the end of April were 481,044 bales (480-lb), up from 480,602 in March. Stocks held in public storage and compresses in April totaled 8.2 million bales, down from 9.3 million in March. Active spindles in April totaled 3.6 million, of which 1.98 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 78.4 percent.
U.S. cotton exports in March 2001 totaled 720,000 (480-lb.) bales, 106,000 bales above February 2001 exports of 614,000 and 258,000 bales below March 2000 exports of 978,000 bales, according to the U.S. Bureau of the Census. The leading markets in March were Mexico, Indonesia, Taiwan, Korea, Turkey and Hong Kong.
U.S. cotton imports in March were 1,000 bales after no imports were reported in February. Imports for the same month last year were 2,600 bales.