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U.S. and World Cotton U.S. and World Cotton Economic OutlookEconomic Outlook
November 2002November 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
November 2002November 2002
Prepared by:Prepared by:
Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council
Macroeconomic and Macroeconomic and Sector-level PerformanceSector-level Performance
Percent
-4
-2
0
2
4
6
8
90 91 92 93 94 95 96 97 98 99 00 01 02
Percent
-4
-2
0
2
4
6
8
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
World US Dev.Countries
Dev. Asia Countriesin
Transition
2000 2001 2002
Percent
0.0
1.5
3.0
4.5
6.0
7.5
World US Dev.Countries
Dev. Asia Countriesin
Transition
2000 2001 2002
World Real GDP GrowthWorld Real GDP Growth
Billion Dollars
-200
-150
-100
-50
0
50
100
150
200
2001 2002 2003 2004 2005 2006 2007
Aug '02 Mar '02
Billion Dollars
-200
-150
-100
-50
0
50
100
150
200
2001 2002 2003 2004 2005 2006 2007
Aug '02 Mar '02
CBO Federal Budget SurplusCBO Federal Budget Surplus
Billion Dollars
0
10
20
30
40
50
60
90 91 92 93 94 95 96 97 98 99 00 01 02
Market Gov't Emergency
Billion Dollars
0
10
20
30
40
50
60
90 91 92 93 94 95 96 97 98 99 00 01 02
Market Gov't Emergency
U.S. Net Farm IncomeU.S. Net Farm Income
1990-92 = 100
80859095
100105110115120125
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02
Crops Livestock
1990-92 = 100
80859095
100105110115120125
Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02
Crops Livestock
Prices Received IndexPrices Received Index
Prospects for Prospects for Cotton ProductionCotton Production
SoutheastSoutheast 3,600 3,600 3,541 3,541 -0.2 -0.2 Mid-SouthMid-South 4,595 4,595 3,730 3,730 -18.8 -18.8 SouthwestSouthwest 6,311 6,311 6,090 6,090 -3.5 -3.5 WestWest 993 993 755 755 -24.0 -24.0
ALL UPLANDALL UPLAND 15,49915,499 14,11614,116 -8.9-8.9
ALL ELSALL ELS 270 270 265 265 -2.0 -2.0
ALL COTTONALL COTTON 15,769 15,769 14,381 14,381 -8.8 -8.8
U.S. Cotton Plantings U.S. Cotton Plantings ((AugAug Crop Production) Crop Production)
20012001 20022002 %% Actual Actual Estimated Estimated ChangeChange
Thousand AcresThousand Acres
Million Acres
0
2
4
6
8
10
12
14
16
18
91 92 93 94 95 96 97 98 99 00 01 02
Million Acres
0
2
4
6
8
10
12
14
16
18
91 92 93 94 95 96 97 98 99 00 01 02
U.S. Cotton Planted AreaU.S. Cotton Planted Area
SoutheastSoutheast 751 751 542 542 634 634 Mid-SouthMid-South 734 734 783 783 699 699 SouthwestSouthwest 482 482 529 529 475 475 WestWest 1,266 1,266 1,336 1,336 1,196 1,196
ALL UPLANDALL UPLAND 694694 653653 641641
ALL ELSALL ELS 1,254 1,254 1,263 1,263 1,095 1,095
ALL COTTONALL COTTON 705 705 665 665 650 650
2002 U.S. Cotton Crop Yield Estimates2002 U.S. Cotton Crop Yield Estimates
20012001 20022002 5-Yr.5-Yr. Actual Actual Estimated Estimated AverageAverage
Lb. per Harvested AcreLb. per Harvested Acre
Pounds per Acre
0
100
200
300
400
500
600
700
800
91 92 93 94 95 96 97 98 99 00 01 02
Pounds per Acre
0
100
200
300
400
500
600
700
800
91 92 93 94 95 96 97 98 99 00 01 02
U.S. Cotton Yield U.S. Cotton Yield per Harvested Acreper Harvested Acre
0
5
10
15
20
25
89 90 91 92 93 94 95 96 97 98 99 00 01 02
Per
cen
t
5 Year Mov. Avg.
0
5
10
15
20
25
89 90 91 92 93 94 95 96 97 98 99 00 01 02
Per
cen
t
5 Year Mov. Avg.
U.S. Cotton AbandonmentU.S. Cotton AbandonmentU.S. Cotton AbandonmentU.S. Cotton Abandonment
Million Bales
0
5
10
15
20
25
93 94 95 96 97 98 99 00 01 02
Million Bales
0
5
10
15
20
25
93 94 95 96 97 98 99 00 01 02
U.S. Cotton ProductionU.S. Cotton Production
Million Acres
0
10
20
30
4050
60
70
80
90
100
91 92 93 94 95 96 97 98 99 00 01 02
Million Acres
0
10
20
30
4050
60
70
80
90
100
91 92 93 94 95 96 97 98 99 00 01 02
World Cotton Harvested AreaWorld Cotton Harvested Area
Million Bales
0
20
40
60
80
100
120
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0
20
40
60
80
100
120
91 92 93 94 95 96 97 98 99 00 01 02
World Cotton ProductionWorld Cotton Production
Outlook for Outlook for Mill UseMill Use
80
90
100
110
120
130
140
150
Jan
-96
Jul-
96
Jan
-97
Jul-
97
Jan
-98
Jul-
98
Jan
-99
Jul-
99
Jan
-00
Jul-
00
Jan
-01
Jul-
01
Jan
-02
Jul-
02
Major Currencies
Other Important TradePartners
80
90
100
110
120
130
140
150
Jan
-96
Jul-
96
Jan
-97
Jul-
97
Jan
-98
Jul-
98
Jan
-99
Jul-
99
Jan
-00
Jul-
00
Jan
-01
Jul-
01
Jan
-02
Jul-
02
Major Currencies
Other Important TradePartners
Real Exchange Rate IndicesReal Exchange Rate IndicesSource: Federal Reserve BoardSource: Federal Reserve Board
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 Importsby Country of Originby Country of Origin
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 480 Lb Bale Equivalents
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998-00 Avg2001
2002
Million 480 Lb Bale Equivalents
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998-00 Avg2001
2002
Monthly Net Imports Monthly Net Imports of Cotton Textilesof Cotton Textiles
Million Bales
0
3
6
9
12
15
18
21
24
91 92 93 94 95 96 97 98 99 00 01
Domestic Imported
Million Bales
0
3
6
9
12
15
18
21
24
91 92 93 94 95 96 97 98 99 00 01
Domestic Imported
Net Domestic Cotton ConsumptionNet Domestic Cotton Consumption
Million 480 Lb Bale Equivalents
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998-00 Avg2001
2002
Million 480 Lb Bale Equivalents
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998-00 Avg2001
2002
Monthly Net Domestic ConsumptionMonthly Net Domestic Consumptionof Cottonof Cotton
Million Bales
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998-00 Avg2001
2002
Million Bales
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998-00 Avg2001
2002
Monthly Cotton Mill UseMonthly Cotton Mill Use
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000A
ug-0
0
Oct
-00
Dec
-00
Feb-
01
Apr
-01
Jun-
01
Aug
-01
Oct
-01
Dec
-01
Feb-
02
Apr
-02
Jun-
02
Aug
-02
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000A
ug-0
0
Oct
-00
Dec
-00
Feb-
01
Apr
-01
Jun-
01
Aug
-01
Oct
-01
Dec
-01
Feb-
02
Apr
-02
Jun-
02
Aug
-02
Average Daily Mill Use (Bales)Average Daily Mill Use (Bales)
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
20
40
60
80
100
91 92 93 94 95 96 97 98 99 00 01 02
Million Bales
0
20
40
60
80
100
91 92 93 94 95 96 97 98 99 00 01 02
World Cotton Mill UseWorld Cotton Mill Use
U.S. Export PotentialU.S. Export Potential
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
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
2002YTD2002YTD
CountryCountry (000 (000 Bales)Bales)
MexicoMexico 1,7561,756
Indonesia 458Indonesia 458
CanadaCanada 420420
ChinaChina 341 341
KoreaKorea 280 280
JapanJapan 273 273
2002YTD2002YTD
CountryCountry (000 (000 Bales)Bales)
MexicoMexico 1,7561,756
Indonesia 458Indonesia 458
CanadaCanada 420420
ChinaChina 341 341
KoreaKorea 280 280
JapanJapan 273 273
Cents per Pound
0
2
4
6
8
10
12
Jan
-00
May
-00
Oct
-00
Mar
-01
Jul-
01
Dec
-01
Ap
r-02
Sep
-02
Cents per Pound
0
2
4
6
8
10
12
Jan
-00
May
-00
Oct
-00
Mar
-01
Jul-
01
Dec
-01
Ap
r-02
Sep
-02
Step 2 Payment RateStep 2 Payment Rate
Million Bales
-4
0
4
8
12
16
20
92 93 94 95 96 97 98 99 00 01 02
Foreign
Foreign less China
Million Bales
-4
0
4
8
12
16
20
92 93 94 95 96 97 98 99 00 01 02
Foreign
Foreign less China
Foreign Mill Consumption Foreign Mill Consumption less Productionless Production
Million Bales
-4
0
4
8
12
16
20
92 93 94 95 96 97 98 99 00 01 02
US ExportsForeignForeign less China
Million Bales
-4
0
4
8
12
16
20
92 93 94 95 96 97 98 99 00 01 02
US ExportsForeignForeign less China
Foreign Mill Consumption Foreign Mill Consumption less Productionless Production
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
Million Bales
-3
-2
-1
0
1
2
3
91 92 93 94 95 96 97 98 99 00 01 02
India Pakistan
Million Bales
-3
-2
-1
0
1
2
3
91 92 93 94 95 96 97 98 99 00 01 02
India Pakistan
India and Pakistan Net TradeIndia and Pakistan Net Trade
Stocks, Prices, ReturnsStocks, Prices, Returns
Million Bales
0
5
10
15
20
25
30
93 94 95 96 97 98 99 00 01 02
U.S. China Outside China & US
Million Bales
0
5
10
15
20
25
30
93 94 95 96 97 98 99 00 01 02
U.S. China Outside China & US
Cotton Ending StocksCotton Ending Stocks
Cents per Pound
20
30
40
50
60
70
80
90
Ja
n-9
8
Ju
n-9
8
De
c-9
8
Ju
n-9
9
No
v-9
9
Ma
y-0
0
Oc
t-0
0
Ap
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
A US4134 USNE
Cents per Pound
20
30
40
50
60
70
80
90
Ja
n-9
8
Ju
n-9
8
De
c-9
8
Ju
n-9
9
No
v-9
9
Ma
y-0
0
Oc
t-0
0
Ap
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
A US4134 USNE
Cotton PricesCotton Prices
Cents per Pound
0
10
20
30
40
50
60
70
80
90
Ja
n-9
8
Ma
y-9
8
Oc
t-9
8
Ma
r-9
9
Ju
l-9
9
De
c-9
9
Ma
y-0
0
Se
p-0
0
Fe
b-0
1
Ju
l-0
1
No
v-0
1
Ap
r-0
2
Se
p-0
2
US4134 LDP Loan Rate
Cents per Pound
0
10
20
30
40
50
60
70
80
90
Ja
n-9
8
Ma
y-9
8
Oc
t-9
8
Ma
r-9
9
Ju
l-9
9
De
c-9
9
Ma
y-0
0
Se
p-0
0
Fe
b-0
1
Ju
l-0
1
No
v-0
1
Ap
r-0
2
Se
p-0
2
US4134 LDP Loan Rate
Cotton Price and LDPCotton Price and LDP
Cents per Pound
20
30
40
50
60
70
Jan Feb Mar May Jun Aug Sep Nov
Dec-01 Dec-02
Cents per Pound
20
30
40
50
60
70
Jan Feb Mar May Jun Aug Sep Nov
Dec-01 Dec-02
December Cotton FuturesDecember Cotton Futures
Summary of the Summary of the Supply & Demand SituationSupply & Demand Situation
U.S. Supply and DemandU.S. Supply and DemandMillion BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.47.4
ProductionProduction 20.320.3 17.817.8
ImportsImports 0.00.0 0.00.0
Total SupplyTotal Supply 26.326.3 25.225.2Mill UseMill Use 7.77.7 7.77.7
ExportsExports 11.011.0 10.810.8
Total OfftakeTotal Offtake 18.718.7 18.518.5Ending StocksEnding Stocks 7.47.4 6.86.8Stocks-to-Use RatioStocks-to-Use Ratio 39.7%39.7% 36.8%36.8%
Million BalesMillion Bales
Beginning StocksBeginning Stocks 6.06.0 7.47.4
ProductionProduction 20.320.3 17.817.8
ImportsImports 0.00.0 0.00.0
Total SupplyTotal Supply 26.326.3 25.225.2Mill UseMill Use 7.77.7 7.77.7
ExportsExports 11.011.0 10.810.8
Total OfftakeTotal Offtake 18.718.7 18.518.5Ending StocksEnding Stocks 7.47.4 6.86.8Stocks-to-Use RatioStocks-to-Use Ratio 39.7%39.7% 36.8%36.8%
2001/022001/022001/022001/02 2002/03(p) 2002/03(p) 2002/03(p) 2002/03(p)
World Supply and DemandWorld Supply and DemandMillion BalesMillion Bales
Beginning StocksBeginning Stocks 42.742.7 47.547.5
ProductionProduction 98.498.4 88.188.1
Total SupplyTotal Supply 141.1141.1 135.6135.6
Mill UseMill Use 94.194.1 96.296.2
Ending StocksEnding Stocks 47.547.5 40.040.0
Stocks-to-Use RatioStocks-to-Use Ratio 50.5%50.5% 41.6%41.6%
Million BalesMillion Bales
Beginning StocksBeginning Stocks 42.742.7 47.547.5
ProductionProduction 98.498.4 88.188.1
Total SupplyTotal Supply 141.1141.1 135.6135.6
Mill UseMill Use 94.194.1 96.296.2
Ending StocksEnding Stocks 47.547.5 40.040.0
Stocks-to-Use RatioStocks-to-Use Ratio 50.5%50.5% 41.6%41.6%
2001/022001/022001/022001/02 2002/03 2002/03 2002/03 2002/03
Prices of Prices of Other CommoditiesOther Commodities
150
175
200
225
250
275
300
Au
g
Oc
t
De
c
Fe
b
Ap
r
Ju
n
Au
g
Sep-01 Sep-02
150
175
200
225
250
275
300
Au
g
Oc
t
De
c
Fe
b
Ap
r
Ju
n
Au
g
Sep-01 Sep-02
September Corn FuturesSeptember Corn Futures
400
450
500
550
600
650
700
Au
g
Oc
t
De
c
Fe
b
Ap
r
Ju
n
Au
g
Oc
t
Nov-01 Nov-02
400
450
500
550
600
650
700
Au
g
Oc
t
De
c
Fe
b
Ap
r
Ju
n
Au
g
Oc
t
Nov-01 Nov-02
November Soybean FuturesNovember Soybean Futures
MerchantsMerchantsGinnersGinners CrushersCrushers
ProducersProducers
CooperativesCooperatives
WarehousesWarehousesManufacturersManufacturers