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U.S. and World Cotton U.S. and World Cotton Economic OutlookEconomic Outlook
June 2002June 2002
Prepared by:Prepared by:
Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council
U.S. and World Cotton U.S. and World Cotton Economic OutlookEconomic Outlook
June 2002June 2002
Prepared by:Prepared by:
Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council
Percent
-4
-2
0
2
4
6
8
10
90 91 92 93 94 95 96 97 98 99 00 01 02
Percent
-4
-2
0
2
4
6
8
10
90 91 92 93 94 95 96 97 98 99 00 01 02
U.S. Real GDP GrowthU.S. Real GDP Growth
Percent
0.0
1.5
3.0
4.5
6.0
7.5
9.0
World US MajorMarket
NIC OtherAsia
LatinAmerica
2000 2001 2002
Percent
0.0
1.5
3.0
4.5
6.0
7.5
9.0
World US MajorMarket
NIC OtherAsia
LatinAmerica
2000 2001 2002
World Real GDP GrowthWorld Real GDP Growth
$ Billion
0
10
20
30
40
50
60
89 90 91 92 93 94 95 96 97 98 99 00 01 02
Market Gov't Emrgy New Spdg
$ Billion
0
10
20
30
40
50
60
89 90 91 92 93 94 95 96 97 98 99 00 01 02
Market Gov't Emrgy New Spdg
U.S. Net Farm IncomeU.S. Net Farm Income
$ Billion
0
5
10
15
20
25
30
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Program Emergency Baseline
$ Billion
0
5
10
15
20
25
30
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Program Emergency Baseline
Agricultural SpendingAgricultural Spending
$ Billion
0
5
10
15
20
25
30
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Program Emergency Baseline New Spdg
$ Billion
0
5
10
15
20
25
30
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Program Emergency Baseline New Spdg
Agricultural SpendingAgricultural Spending
80
90
100
110
120
Ja
n-9
8
Ju
l-9
8
Ja
n-9
9
Ju
l-9
9
Ja
n-0
0
Ju
l-0
0
Ja
n-0
1
Ju
l-0
1
Ja
n-0
2
80
90
100
110
120
Ja
n-9
8
Ju
l-9
8
Ja
n-9
9
Ju
l-9
9
Ja
n-0
0
Ju
l-0
0
Ja
n-0
1
Ju
l-0
1
Ja
n-0
2
FED’s Major Currencies Dollar FED’s Major Currencies Dollar IndexIndex
Base: 1995=100
20
40
60
80
100
120
140
Jan
-97
Ap
r-97
Jul-9
7
Oct
-97
Jan
-98
Ap
r-98
Jul-9
8
Oct
-98
Jan
-99
Ap
r-99
Jul-9
9
Oct
-99
Jan
-00
Ap
r-00
Jul-0
0
Oct
-00
Jan
-01
Ap
r-01
Jul-0
1
Oct
-01
Jan
-02
Ag. Trade WeightedExchangeNearby Cotton Futures
Base: 1995=100
20
40
60
80
100
120
140
Jan
-97
Ap
r-97
Jul-9
7
Oct
-97
Jan
-98
Ap
r-98
Jul-9
8
Oct
-98
Jan
-99
Ap
r-99
Jul-9
9
Oct
-99
Jan
-00
Ap
r-00
Jul-0
0
Oct
-00
Jan
-01
Ap
r-01
Jul-0
1
Oct
-01
Jan
-02
Ag. Trade WeightedExchangeNearby Cotton Futures
Indices: Exchange Rate & Cotton FuturesIndices: Exchange Rate & Cotton Futures
Cents per Lb.
25
35
45
55
65
75
85
95
Au
g-9
5
Ma
y-9
6
Ma
r-9
7
Ja
n-9
8
No
v-9
8
Se
p-9
9
Ju
l-0
0
Ma
y-0
1
Ma
r-0
2
Cents per Lb.
25
35
45
55
65
75
85
95
Au
g-9
5
Ma
y-9
6
Ma
r-9
7
Ja
n-9
8
No
v-9
8
Se
p-9
9
Ju
l-0
0
Ma
y-0
1
Ma
r-0
2
U.S. 4134 Spot PriceU.S. 4134 Spot Price
Cents per Lb.
20
30
40
50
60
70
80
90
100
Au
g-9
5
Ma
y-9
6
Ma
r-9
7
Ja
n-9
8
No
v-9
8
Se
p-9
9
Ju
l-0
0
Ma
y-0
1
Ma
r-0
2
A 4134
Cents per Lb.
20
30
40
50
60
70
80
90
100
Au
g-9
5
Ma
y-9
6
Ma
r-9
7
Ja
n-9
8
No
v-9
8
Se
p-9
9
Ju
l-0
0
Ma
y-0
1
Ma
r-0
2
A 4134
U.S. 4134 Spot Price and “A” IndexU.S. 4134 Spot Price and “A” Index
U.S. Supply and DemandU.S. Supply and DemandMillion BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0
ProductionProduction 20.320.3
ImportsImports .0.0
Total SupplyTotal Supply 26.326.3Mill UseMill Use 7.67.6
ExportsExports 11.011.0
Total OfftakeTotal Offtake 18.618.6Ending StocksEnding Stocks 7.77.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4%
Million BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0
ProductionProduction 20.320.3
ImportsImports .0.0
Total SupplyTotal Supply 26.326.3Mill UseMill Use 7.67.6
ExportsExports 11.011.0
Total OfftakeTotal Offtake 18.618.6Ending StocksEnding Stocks 7.77.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4%
2001/022001/022001/022001/02 2002/03 2002/03 2002/03 2002/03
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01
U.S. Cotton Mill UseU.S. Cotton Mill Use
05,000
10,00015,00020,00025,00030,00035,00040,000A
ug-0
0
Oct
-00
Dec
-00
Feb-
01
Apr
-01
Jun-
01
Aug
-01
Oct
-01
Dec
-01
Feb-
02
Apr
-02
05,000
10,00015,00020,00025,00030,00035,00040,000A
ug-0
0
Oct
-00
Dec
-00
Feb-
01
Apr
-01
Jun-
01
Aug
-01
Oct
-01
Dec
-01
Feb-
02
Apr
-02
Average Daily Mill UseAverage Daily Mill Use
Million Bales
03
69
1215
1821
24
91 92 93 94 95 96 97 98 99 0 01e
Million Bales
03
69
1215
1821
24
91 92 93 94 95 96 97 98 99 0 01e
Net Domestic Cotton ConsumptionNet Domestic Cotton Consumption
Million Bales
0
1
2
3
4
5
6
93 94 95 96 97 98 99 00 01
Million Bales
0
1
2
3
4
5
6
93 94 95 96 97 98 99 00 01
U.S. Cotton Textile & Apparel ExportsU.S. Cotton Textile & Apparel Exports
Million Bales
0
1
2
3
4
5
6
93 94 95 96 97 98 99 00 01
NAFTA CBI Other
Million Bales
0
1
2
3
4
5
6
93 94 95 96 97 98 99 00 01
NAFTA CBI Other
U.S. Cotton Textile & Apparel ExportsU.S. Cotton Textile & Apparel Exports
Million Bales
02468
1012141618
93 94 95 96 97 98 99 00 01
Million Bales
02468
1012141618
93 94 95 96 97 98 99 00 01
U.S. Cotton Textile & Apparel ImportsU.S. Cotton Textile & Apparel Imports
Million Bales
02468
1012141618
93 94 95 96 97 98 99 00 01
NAFTA CBI Other
Million Bales
02468
1012141618
93 94 95 96 97 98 99 00 01
NAFTA CBI Other
U.S. Cotton Textile & Apparel ImportsU.S. Cotton Textile & Apparel Imports
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01
U.S. Cotton ExportsU.S. Cotton Exports
Top Customers for U.S. Raw Top Customers for U.S. Raw CottonCotton
19901990
CountyCounty (000 Bales)(000 Bales)
JapanJapan 1,5381,538
ChinaChina 1,3471,347
KoreaKorea 1,1851,185
IndonesiaIndonesia 552552
ItalyItaly 424424
TaiwanTaiwan 354 354
19901990
CountyCounty (000 Bales)(000 Bales)
JapanJapan 1,5381,538
ChinaChina 1,3471,347
KoreaKorea 1,1851,185
IndonesiaIndonesia 552552
ItalyItaly 424424
TaiwanTaiwan 354 354
2001YTD2001YTD
CountryCountry (000 (000 Bales)Bales)
MexicoMexico 2,3932,393
Turkey 1,541Turkey 1,541
IndiaIndia 1,057 1,057
IndonesiaIndonesia 1,0401,040
TaiwanTaiwan 823 823
ThailandThailand 736 736
2001YTD2001YTD
CountryCountry (000 (000 Bales)Bales)
MexicoMexico 2,3932,393
Turkey 1,541Turkey 1,541
IndiaIndia 1,057 1,057
IndonesiaIndonesia 1,0401,040
TaiwanTaiwan 823 823
ThailandThailand 736 736
Million Bales
0
2
4
6
8
10
91 92 93 94 95 96 97 98 99 00 01
Million Bales
0
2
4
6
8
10
91 92 93 94 95 96 97 98 99 00 01
U.S. Ending Cotton StocksU.S. Ending Cotton Stocks
U.S. Supply and DemandU.S. Supply and DemandMillion BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.77.7
ProductionProduction 20.320.3 17.817.8
ImportsImports .0.0 .0.0
Total SupplyTotal Supply 26.326.3 25.525.5Mill UseMill Use 7.67.6
ExportsExports 11.011.0
Total OfftakeTotal Offtake 18.618.6Ending StocksEnding Stocks 7.77.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4%
Million BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.77.7
ProductionProduction 20.320.3 17.817.8
ImportsImports .0.0 .0.0
Total SupplyTotal Supply 26.326.3 25.525.5Mill UseMill Use 7.67.6
ExportsExports 11.011.0
Total OfftakeTotal Offtake 18.618.6Ending StocksEnding Stocks 7.77.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4%
2001/022001/022001/022001/02 2002/03 2002/03 2002/03 2002/03
150
175
200
225
250
275
300
Au
g-0
0
Oc
t-0
0
De
c-0
0
Fe
b-0
1
Ap
r-0
1
Ju
n-0
1
Au
g-0
1
Sep-01 Sep-02
150
175
200
225
250
275
300
Au
g-0
0
Oc
t-0
0
De
c-0
0
Fe
b-0
1
Ap
r-0
1
Ju
n-0
1
Au
g-0
1
Sep-01 Sep-02
September Corn FuturesSeptember Corn Futures
400
450
500
550
600
650
700
Au
g-0
0
Oc
t-0
0
De
c-0
0
Fe
b-0
1
Ap
r-0
1
Ju
n-0
1
Au
g-0
1
Oc
t-0
1
Nov-01 Nov-02
400
450
500
550
600
650
700
Au
g-0
0
Oc
t-0
0
De
c-0
0
Fe
b-0
1
Ap
r-0
1
Ju
n-0
1
Au
g-0
1
Oc
t-0
1
Nov-01 Nov-02
November Soybean FuturesNovember Soybean Futures
20
30
40
50
60
70
80
Au
g-0
0
Oc
t-0
0
De
c-0
0
Fe
b-0
1
Ap
r-0
1
Ju
n-0
1
Au
g-0
1
Oc
t-0
1
Dec-01 Dec-02
20
30
40
50
60
70
80
Au
g-0
0
Oc
t-0
0
De
c-0
0
Fe
b-0
1
Ap
r-0
1
Ju
n-0
1
Au
g-0
1
Oc
t-0
1
Dec-01 Dec-02
December Cotton FuturesDecember Cotton Futures
20
30
40
50
60
70
Au
g-0
0 0
8/29
/00
09/
27/0
0O
ct-0
0N
ov-
00D
ec-0
0Ja
n-0
1F
eb-0
1M
ar-0
1A
pr-
01M
ay-0
1Ju
n-0
1Ju
l-01
Au
g-0
1S
ep-0
1O
ct-0
1N
ov-
01D
ec-0
1Ja
n-0
2F
eb-0
2M
ar-0
2A
pr-
02M
ay-0
2
Dec-00 Dec-01 Dec-02 Dec-0320
30
40
50
60
70
Au
g-0
0 0
8/29
/00
09/
27/0
0O
ct-0
0N
ov-
00D
ec-0
0Ja
n-0
1F
eb-0
1M
ar-0
1A
pr-
01M
ay-0
1Ju
n-0
1Ju
l-01
Au
g-0
1S
ep-0
1O
ct-0
1N
ov-
01D
ec-0
1Ja
n-0
2F
eb-0
2M
ar-0
2A
pr-
02M
ay-0
2
Dec-00 Dec-01 Dec-02 Dec-03
NYBOT Dec. Contracts since 8/1/00NYBOT Dec. Contracts since 8/1/00
SoutheastSoutheast 3,610 3,610 3,548 3,548 -1.7 -1.7 Mid-SouthMid-South 4,595 4,595 4,015 4,015 -12.6 -12.6 SouthwestSouthwest 6,312 6,312 6,028 6,028 -4.5 -4.5 WestWest 1,010 1,010 905 905 -10.4 -10.4
ALL UPLANDALL UPLAND 15,52715,527 14,49614,496 -6.6-6.6
ALL ELSALL ELS 261 261 275 275 5.3 5.3
ALL COTTONALL COTTON 15,788 15,788 14,771 14,771 -6.4 -6.4
2002 U.S. Planting Intentions2002 U.S. Planting Intentions
20012001 20022002 %% Actual Actual Intended Intended ChangeChange
Thousand AcresThousand Acres
U.S. Supply and DemandU.S. Supply and DemandMillion BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.77.7
ProductionProduction 20.320.3 17.817.8
ImportsImports .0.0 .0.0
Total SupplyTotal Supply 26.326.3 25.525.5Mill UseMill Use 7.67.6 7.87.8
ExportsExports 11.011.0 11.011.0
Total OfftakeTotal Offtake 18.618.6 18.818.8Ending StocksEnding Stocks 7.77.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4%
Million BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.77.7
ProductionProduction 20.320.3 17.817.8
ImportsImports .0.0 .0.0
Total SupplyTotal Supply 26.326.3 25.525.5Mill UseMill Use 7.67.6 7.87.8
ExportsExports 11.011.0 11.011.0
Total OfftakeTotal Offtake 18.618.6 18.818.8Ending StocksEnding Stocks 7.77.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4%
2001/022001/022001/022001/02 2002/03 2002/03 2002/03 2002/03
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01 02
U.S. Cotton Mill UseU.S. Cotton Mill Use
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0
2
4
6
8
10
12
91 92 93 94 95 96 97 98 99 00 01 02
U.S. Cotton ExportsU.S. Cotton Exports
Million Bales
-3
-2
-1
0
1
2
3
91 92 93 94 95 96 97 98 99 00 01
India Pakistan
Million Bales
-3
-2
-1
0
1
2
3
91 92 93 94 95 96 97 98 99 00 01
India Pakistan
India and Pakistan Net TradeIndia and Pakistan Net Trade
Million Bales
-4
-3
-2
-1
0
1
2
91 92 93 94 95 96 97 98 99 '00 01 02
Million Bales
-4
-3
-2
-1
0
1
2
91 92 93 94 95 96 97 98 99 '00 01 02
Chinese Net TradeChinese Net Trade
??
Begin StockBegin Stock 12,500 12,500 11,590 11,590
ProductionProduction 20,600 20,600 21,150 21,150 20,655 20,655
ImportsImports 1,800 1,800 2,000 2,000 1,375 1,375
Total SupplyTotal Supply 34,900 34,900 34,740 34,740
Mill Use Mill Use 25,700 25,700 25,000 25,000 24,300 24,300
ExportsExports 200 200 200 200 230 230
End. StocksEnd. Stocks 8,900 8,900 9,540 9,540
2002/03 Chinese Estimates2002/03 Chinese Estimates
ICAC ICAC USDA USDA CotlookCotlook
U.S. Supply and DemandU.S. Supply and DemandMillion BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.77.7
ProductionProduction 20.320.3 17.817.8
ImportsImports .0.0 .0.0
Total SupplyTotal Supply 26.326.3 25.525.5Mill UseMill Use 7.67.6 7.87.8
ExportsExports 11.011.0 11.011.0
Total OfftakeTotal Offtake 18.618.6 18.818.8Ending StocksEnding Stocks 7.77.7 6.76.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4% 35.6%35.6%
Million BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.77.7
ProductionProduction 20.320.3 17.817.8
ImportsImports .0.0 .0.0
Total SupplyTotal Supply 26.326.3 25.525.5Mill UseMill Use 7.67.6 7.87.8
ExportsExports 11.011.0 11.011.0
Total OfftakeTotal Offtake 18.618.6 18.818.8Ending StocksEnding Stocks 7.77.7 6.76.7Stocks-to-Use RatioStocks-to-Use Ratio 41.4%41.4% 35.6%35.6%
2001/022001/022001/022001/02 2002/03 2002/03 2002/03 2002/03
World Supply and DemandWorld Supply and DemandMillion BalesMillion Bales
Beginning StocksBeginning Stocks 40.140.1 44.844.8
ProductionProduction 98.098.0 91.091.0
Total SupplyTotal Supply 138.0138.0 135.8135.8
Mill UseMill Use 93.593.5 95.595.5
Ending StocksEnding Stocks 44.844.8 40.640.6
Stocks-to-Use RatioStocks-to-Use Ratio 47.9%47.9% 42.5%42.5%
Million BalesMillion Bales
Beginning StocksBeginning Stocks 40.140.1 44.844.8
ProductionProduction 98.098.0 91.091.0
Total SupplyTotal Supply 138.0138.0 135.8135.8
Mill UseMill Use 93.593.5 95.595.5
Ending StocksEnding Stocks 44.844.8 40.640.6
Stocks-to-Use RatioStocks-to-Use Ratio 47.9%47.9% 42.5%42.5%
2001/022001/022001/022001/02 2002/03 2002/03 2002/03 2002/03
Million Bales
0
20
40
60
80
100
120
91 92 93 94 95 96 97 98 99 00 01
Million Bales
0
20
40
60
80
100
120
91 92 93 94 95 96 97 98 99 00 01
World Cotton ProductionWorld Cotton Production
Million Bales
0102030405060708090
100
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0102030405060708090
100
91 92 93 94 95 96 97 98 99 00 01 02
World Cotton ProductionWorld Cotton Production
Million Bales
0102030405060708090
100
91 92 93 94 95 96 97 98 99 00 01
Million Bales
0102030405060708090
100
91 92 93 94 95 96 97 98 99 00 01
World Cotton Mill UseWorld Cotton Mill Use
Million Bales
0102030405060708090
100110
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0102030405060708090
100110
91 92 93 94 95 96 97 98 99 00 01 02
World Cotton Mill UseWorld Cotton Mill Use
Million Bales
0
10
20
30
40
91 92 93 94 95 96 97 98 99 00 01
Million Bales
0
10
20
30
40
91 92 93 94 95 96 97 98 99 00 01
World Cotton ExportsWorld Cotton Exports
Million Bales
0
510
15
20
2530
35
40
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0
510
15
20
2530
35
40
91 92 93 94 95 96 97 98 99 00 01 02
World Cotton ExportsWorld Cotton Exports
Million Bales
0
5
10
15
20
25
30
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0
5
10
15
20
25
30
91 92 93 94 95 96 97 98 99 00 01 02
Foreign Cotton Stocks, Net ChinaForeign Cotton Stocks, Net China
Farm Bill ImpactsFarm Bill Impacts
• DEMAND STIMULUSDEMAND STIMULUS
–Elimination of Step 2 threshold of Elimination of Step 2 threshold of 1.25 cents1.25 cents
–Adds 400 - 500,000 balesAdds 400 - 500,000 bales
• PRODUCTION NEUTRALPRODUCTION NEUTRAL
–Payments are decoupled from Payments are decoupled from plantingplanting
• DEMAND STIMULUSDEMAND STIMULUS
–Elimination of Step 2 threshold of Elimination of Step 2 threshold of 1.25 cents1.25 cents
–Adds 400 - 500,000 balesAdds 400 - 500,000 bales
• PRODUCTION NEUTRALPRODUCTION NEUTRAL
–Payments are decoupled from Payments are decoupled from plantingplanting
Million Acres
0
4
8
12
16
20
91 92 93 94 95 96 97 98 99 00 01 02e
Southeast Mid-South Southwest West
Million Acres
0
4
8
12
16
20
91 92 93 94 95 96 97 98 99 00 01 02e
Southeast Mid-South Southwest West
U.S. Upland Planted AreaU.S. Upland Planted Area
35404550556065707580
45 48 51 54 57 60 63 66 69 72 75
VALUE ON NYBOT
Cash Loan Gain
Direct Counter
35404550556065707580
45 48 51 54 57 60 63 66 69 72 75
VALUE ON NYBOT
Cash Loan Gain
Direct Counter
Grower ReceiptsGrower Receipts
MerchantsMerchantsGinnersGinners CrushersCrushers
ProducersProducers
CooperativesCooperatives
WarehousesWarehousesManufacturersManufacturers