June 2002 Edition:
MY 2001/02 Production Forecast Continues Up, Consumption Outlook Continues to Recover
The changes in the June forecast, the twelfth forecast for the 2001/02 marketing year, can be summarized as increasing production and uncertainty about consumption. Production forecasts rose as evidence of favorable crop conditions raised yield estimates above the historical averages that were assumed early in the season. Record yields are expected in China, while in Turkey, Brazil, and Greece, yields are at near record levels. Australia and many Franc Zone African countries are experiencing the highest yields in ten years, while the United States and Egypt are seeing 5-year highs, yields in India and Pakistan are slightly above 5-year averages. Some of the yield effect on the production forecast was offset by decreases in the area forecasts in Southern Hemisphere countries, as reaction to low prices was stronger than first anticipated.
Overall world economic growth and low cotton prices are major factors in the world consumption estimate. The early forecasts were based on weakening economic indicators. The events of September 11th added downward pressure to the global economic situation and the forecast for consumption. Recent months have seen unexpected recovery in mill demand.
Despite the recent recovery in the consumption forecast, the difference between production and consumption has remained at roughly 5 million bales, up from the initial estimate of 2 million bales forecast last summer. This large gap between production and consumption has maintained the downward pressure on cotton prices.
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TABLE OF CONTENTS
World Cotton Outlook
U.S. Cotton Highlights
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