July 2004 Edition:
Recent Growing Conditions Favorable for Increased Production
The latest USDA forecast shows increased world production for both 2003/04 and 2004/05. Harvested area is rising and growing conditions in recent months have proven favorable across the world. For 2003/04, countries that harvest later in the crop year are showing better than expected yields. India, which harvests close to half of its crop after January, is estimated to have had record yields, 359 kg per hectare, 18 percent greater than last year. Brazil, which is nearing the end of its harvest, is expected to see a 2 percent increase over what was already a record yield last year. Even Australia, which will see a significant drop in 2003/04 as compared to last year, has come in with better yields than earlier expected.
For the 2004/05 crop, weather so far has been generally favorable as well. China particularly is heading toward a significant rebound off of last year’s anemic yield. Uzbekistan and Pakistan are also experiencing normal-to-favorable growing conditions. Only the United States is forecast to see a year-to-year drop in yields from last season’s record. U.S. growing conditions so far for 2004/05 are relatively favorable. Among major northern hemisphere production areas, only West Africa is reported to have some problems with a lack of rainfall.
This recent increase in actual and forecast production has depressed prices. The New York December ‘04 futures price for cotton that had been at 65 cents/lb in late April is now below 48 cents/lb. It is important to remember, however, that there is considerable time before the 2004/05 crop is harvested and conditions could change.
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TABLE OF CONTENTS
World Cotton Outlook
U.S. Cotton Highlights
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