U.S. Cotton Outlook

The U.S. MY 2002/03 production forecast was raised 939,000 bales from last month to 18.4 million bales. Based on a National Agricultural Statistics Service survey, the expected average yield for the U.S. crop was raised from 708 kg/Ha to 756 kg/Ha. As opposed to 14 percent last month, U.S. cotton production is now expected to fall 9 percent from MY 2001/02. In light of the larger U.S. production forecast, combined with expectations of lower foreign production and higher foreign consumption, the U.S. export forecast was raised 400,000 bales this month to 11.2 million bales. This would amount to a 2-percent increase in exports over last year; the second largest export figure since 1926, when U.S. exports totaled 11.3 million bales. Forecasted domestic mill use in MY 2002/03 was revised upward 100,000 bales, reflecting an identical adjustment to the MY 2001/02 consumption estimate. The current U.S. consumption forecast of 7.9 million bales represents a 2.6-percent increase from MY 2001/02. Ending stocks are forecasted 6 percent higher than last month at 7 million bales, an 8-percent decline from MY 2001/02.

The only U.S. MY 2001/02 estimate changes were higher domestic use and lower ending stocks.

World Cotton Outlook

The world production forecast for MY 2002/03 was lowered 536,000 bales this month to 89.4 million bales. Due to economic factors and an unfavorable monsoon, forecasted MY 2002/03 production for India was reduced by 1 million bales to 10.5 million. Production forecasts were also lowered for Australia, the African Franc Zone and Syria. Uzbekistan's forecasted production was raised from last month. World production is forecast down 9 percent from MY 2001/02.

The world consumption forecast for MY 2002/03 was raised 555,000 bales, as increases for China, Turkey, the U.S. and Uzbekistan more than offset reductions for Brazil and Hong Kong. These changes reflect changes to MY 2001/02 estimates and reports on textile industry investment. This month's world consumption estimate for MY 2002/03 of 96.7 million bales represents a 2.5-percent increase from MY 2001/02. Revised import forecasts for India and Turkey pushed up the world import forecast 370,000 bales from last month to 31.1 million bales, a 6-percent increase over MY 2001/02 world imports. World ending stocks are now expected to fall 15 percent this year, rather than 12.5 percent, as forecast last month. 

Changes to MY 2001/02 estimates add up to a 700,000-bale increase in the world consumption forecast and a 250,000-bale increase in the world import forecast, attributable to trade and use data on China, Turkey, Thailand and the U.S. According to current estimates, Turkey was the world's largest cotton importer in MY 2001/02.

Cotton Prices

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 July, the index averaged 46.59 cents per pound, up 3.11 cents from the previous month. The African quote was the lowest in the index during the four-week period, averaging 45.27 cents per pound. The Memphis quote averaged 49.50 cents per pound.

U.S. Cotton Highlights

COTTON CONSUMPTION: The seasonally adjusted daily rate of U.S. cotton consumption in June 2002 was 30,372 (480-lb.) bales, up from 29,676 in May. A total of 782,735 bales were consumed during the five weeks of June, compared with 615,831 during the four weeks of May. The seasonally adjusted annualized consumption rate for the month of June was 7.927 million bales, up from 7.746 million in May.

TEXTILE MILL REPORT: Domestic mill buyers purchased a very light volume of 2001-crop cotton for delivery through October. Demand was best for low white or light spotted cotton with short staple and high mike and high white grades with longer staple and higher strength. Some mills continued to give merchants the option of delivering 2001-crop cotton into December. Interest in 2002-crop cotton was very light. Buyers have covered most of their anticipated raw cotton needs through the first quarter 2003. Demand for ring-spun yarn was moderate and demand for open-end yarn was good. Consumption of raw cotton remained steady with some mills operating at capacity. Most mills operated a six to seven day work schedule.

COTTON STOCKS: U.S. cotton stocks on hand in consuming establishments at the end of June were 399,540 bales (480-lb), up from 376,404 in May. Stocks held in public storage and compresses in June totaled 7.86 million bales, down from 9.27 million in May. Active spindles in June totaled 2.74 million, of which 1.59 million were dedicated to 100-percent cotton, compared with 3.5 million for the same time last year, with 1.99 million dedicated to 100-percent cotton. Cotton's share on the cotton spindle system in June was 80.6 percent.

U.S. COTTON EXPORTS in May 2002 totaled 893,128 (480-lb) bales, down from 970,647 bales in April 2002. According to the U.S. Bureau of the Census, Mexico and Turkey were the major destinations in May, accounting for 293,669 bales combined. Taiwan and Indonesia were other important destinations in May. 

U.S. COTTON IMPORTS in May 2002 totaled 823 (480-lb) bales, up from 338 bales in April. The majority of the imports came from Egypt.

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Last modified: Tuesday, August 30, 2005