U.S. Cotton Outlook
This months 2001/02 U.S. projections include higher exports and lower production, consumption and ending stocks. The production forecast is down 111,000 bales to 20.1 million. Domestic mill use is down 200,000 bales based on weaker economic expectations. Exports are now forecast at 9.8 million bales, the highest level since 1926/27.
The U.S. estimates for 2000/01 are unchanged.
World Cotton Outlook
The revised 2001/02 global cotton situation reflects lower production, higher trade and a resulting 873,000-bale decrease in ending stocks. Foreign production is decreased 760,000 bales with decreases in India (400,000 bales), Pakistan (300,000), Australia, Argentina (100,000 each) partially offset by an increase in Uzbekistan (100,000). Consumption increases in Egypt, Vietnam and Peru offset the decrease in the United States. Imports are increased 315,00 bales as much of the production decreases occurred in importing countries. Foreign exports are decreased marginally as increases for Uzbekistan and Tajikistan largely offset decreases in Australia, Pakistan, Argentina and Paraguay. China's imports are unchanged from last month. At present potential imports under China's WTO import tariff rate quota for cotton are expected to be constrained by reduced import demand due to the recent sharp decline in China's internal cotton price.
For 2000/01, only minor changes were seen. Production and export were up 100,000 bales in Australia. Imports and consumption were up in Peru and Vietnam.
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. In November, quotes from Syria, Uzbekistan, Greece, African Franc-Zone, and Spain were included in the index. The index averaged 38.04 cents per pound during the period, a 0.80-cent increase from the previous month. The Greek quote was the lowest in the index during the four-week period, averaging 36.86 cents per pound.
Futures Prices: Nearby December 2001 futures prices in November averaged 33.55 cents per pound, up 2.03 cents from last month. Benchmark March 2002 averaged 35.47 cents per pound.
U.S. Cotton Highlights
Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in October was 29,664 (480-lb.) bales, compared with Septembers level of 30,070. A total of 635,015 bales were consumed during the four weeks in October, compared with 778,921in the five weeks of September. The seasonally adjusted annualized consumption rate for the month of October was 7.74 million bales, down from 7.85 million in September.
Textile mill report: Domestic mills purchased a light volume of cotton for February 2002 through September 2002 delivery. Demand was best for color 42, leaf 4, staple 33, mike 50-53, strength 26 and color 41, leaf 4, staple 34 and longer, strength 28 and mike 35-48 with a mike average no higher than 45. A few mills continued to adjust contracts to accept a slightly higher mike average. Some mills also bought yarn instead of spinning it because of low yarn prices. Interest in ring-spun yarn was good, and interest in open-end yarn was moderate to good. Demand for fine count yarns was good and coarse count yarns was moderate. Sales of domestic denim fabrics, greige cloth, sales yarn, upholstery, print cloth and industrial fabric were moderate; mill sales of specialty yarns were very light. Most mills took four to seven days off for Thanksgiving. A few plants took as many as ten days.
Cotton Stocks: U.S. cotton stocks on hand in consuming establishments at the end of October were 356,640 bales (480-lb), down from 377,542 in September. Stocks held in public storage and compresses in October totaled 9.6 million bales, up from 4.5 million in September. Active spindles in October totaled 3.2 million, of which 1.9 million were dedicated to 100 percent cotton, compared with 4.3 million for the same time last year, with 2.4 million dedicated to 100 percent cotton. Cotton's share on the cotton spindle system in October was 81.4 percent.
U.S. cotton exports in September 2001 totaled 685,000 (480-lb.) bales, down 262,000 bales from the previous month, but up 349,000 bales from the same time last year, according to the U.S. Bureau of the Census. The leading markets in September were India, Mexico, Turkey, Indonesia, Thailand and Taiwan.
There were no U.S. cotton imports in September 2001. Imports for the same month last year were 400 bales.