U.S. Cotton Outlook

The U.S. estimates for 2001/02 are unchanged this month.

This month's U.S. forecast for 2002/03 shows lower production and ending stocks. Production is down 1.3 percent from last month to 17.145 million bales, due to lower estimates for the Southeast and Arizona. The forecasts for domestic mill use and exports are unchanged. Ending stocks are reduced to 6.3 million bales, down 200,000 bales or 3 percent from last month.

World Cotton Outlook

The China consumption estimates for 2000/01 and 2001/02 are raised 250,000 and 500,000 bales, respectively, in response to Chinese government revisions to yarn production estimates for calendar 2001. This reduces China's 2002/03 beginning stocks estimate by 750,000, or 5.5 percent. Due to tighter supplies than previously thought and recent strong import demand, China's 2002/03 import forecast is raised 250,000 bales to 2.25 million. China may be the world's largest importer this marketing year. 

Prior year estimates are revised mainly for Tanzania. Revisions are base on data from the Tanzanian Cotton Board and reflect a decision to account for production during the year in which it is marketed. See Supplement A for detailed data.

World beginning and ending stock forecasts for 2002/03 are reduced this month, but the world production forecast is essentially unchanged and consumption and trade forecasts are revised only marginally. The fall in forecast U.S. production is offset by increases in Pakistan and Kazakhstan. World ending stocks of 37.9 million bales are 3.1 percent below last month's forecast.

Cotton Prices

The A-Index, a principal measure of international cotton prices, is an average of the five lowest quotes of major cotton growths for delivery to Northern European ports. In December, the index averaged 55.16 cents per pound, up 2.92 cents from the previous month. The lowest U.S. Northern Europe quote, which is now California/Arizona, averaged 60.03 cents per pound, up from 55.48 cents per pound last month, when the lowest U.S. quote was Memphis. In New York, the average daily settlement price of the nearby futures contract was 49.60 cents per pound in December, up from 47.81 cents per pound in November.

U.S. Cotton Highlights

COTTON CONSUMPTION: The seasonally adjusted daily rate of U.S. cotton consumption in November 2002 was 28,958 (480-lb.) bales, up from 28,571 in October. A total of 563,598 bales were consumed during the four weeks of November, compared with 606,375 during the four weeks of October. The seasonally adjusted annualized consumption rate for the month of November was 7.558 million bales, up from 7.457 million in October.

TEXTILE MILL REPORT: Domestic mills purchased light volumes of 2002-crop cotton. Most mills have reportedly covered anticipated needs through the second quarter of 2003. Some mills have adjusted their mike specifications to accept a higher average as a result of the higher than normal mike average of the crop. Demand for ring-spun yarn was light to moderate and demand for open-end yarn was moderate to good. Inventory levels continued to play into production scheduling. Most mills took four to seven days off for the Christmas and New Year holidays. 

COTTON STOCKS: U.S. cotton stocks on hand in consuming establishments at the end of November were 448,229 (480-lb.) bales, down from 490,292 in October. Stocks held in public storage and compresses in November totaled 13.64 million bales, up from 9.61 million in October. Active spindles in November totaled 2.68 million, of which 1.56 million were dedicated to 100-percent cotton, compared with 3.15 million for the same time last year, with 1.81 million dedicated to 100-percent cotton. Cotton's share on the cotton spindle system in November was 81.8 percent.

U.S. COTTON EXPORTS in October 2002 totaled 505,455 (480-lb.) bales, or $108.52 million, according to the U.S. Bureau of the Census. That is down from 529,297 bales, worth $115.89 million, in September 2002. Mexico, Turkey, Indonesia and Brazil were the major destinations in October.

U.S. COTTON IMPORTS in October 2002 totaled 5,072 (480-lb.) bales, down from 6,678 bales in September. Egypt accounted for all but about 500 bales imported from Australia.

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Last modified: Sunday, March 17, 2013