November 2002 Edition:
U.S. Exports Off to Slow Start Towards 10.8 Million-Bale Forecast
As of the end of October, total U.S. export commitments (accumulated exports plus outstanding sales) for MY 2002/03 were 25 percent below commitments at the same time last year. Still, at only three months into the marketing year, there is time for U.S. exports to increase dramatically, and reason to expect a final export total near last year's 11-million bale estimate. World import demand is forecast at 29.9 million bales this year, up marginally from 29.6 million in MY 2001/02. The U.S. is expected to have an exportable supply of raw cotton in MY 2002/03 of 17.5 million bales, 1.0 million bales less than in 2001/02. At the same time, however, the foreign exportable supply is forecast to fall more than 6 million bales, due mainly to rapidly expanding consumption in China and poor weather in Australia.
There are several explanations for lagging U.S. export sales thus far. First, markets that are expected to finish the year as major importers, notably India and Turkey, are currently purchasing local crops at relatively low prices while available. Second, uncertainty about the quality of the U.S. crop has restricted export offers. Third, farmers could be expecting higher step 2 rates to be passed on in the form of higher farm-gate prices, and have therefore decided not to sell for the moment. Fourth, market premiums to producers in excess of the CCC loan rate, and step 2 payments to merchants and mills, have heretofore been minimal but are currently rising.
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TABLE OF CONTENTS
World Cotton Outlook
U.S. Cotton Highlights
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