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2010 Outlook in Brief
• A Year for Recovery– Economic growth projected to continue
– Cotton demand improving
– US acres and production reverse 3 years of decline
– Further tightening in the balance sheet
Key Assumptions
• Farm & Trade Policy– Generally assume current policies remain
in place during the timeframe of the outlook
• For US, the ‘08 farm bill• India MSP and China import policy unchanged
• General Economy– International Monetary Fund released
projections in January
Percent Change
8.710.0 9.7
4.33.9
-0.82.42.7
-2.5-4
-2
0
2
4
6
8
10
12
14
00 01 02 03 04 05 06 07 08 09 10 11
World US China
Economic Growth in 2010
Consumer Sentiment Index
0
20
40
60
80
100
120
05 06 07 08 09 10
Low Consumer Confidence
Percent Unemployment
0
2
4
6
8
10
12
05 06 07 08 09 10
Unemployment Remains High
Billion Dollars
1,414
980
1,349
-400
0
400
800
1,200
1,600
00 01 02 03 04 05 06 07 08 09 10 11
CBO’s US Budget Deficit
Cotton Demand
• Yarn Values Improving– Cotlook Yarn Index up 25% from year-ago
levels and 7% higher than Sep ’08
• Textile Trade Up in Recent Months– After peaking at $55 billion in Jul ’08, world
textile exports fell to $36 billion in May ’09– Values in the low $40 billion’s in recent
months
% Change in Mill Use
1.22.5
4.2
-12
-6
0
6
12
00 01 02 03 04 05 06 07 08 09 10
World Mill Use Rebounding
3% GDP
% Change in Mill Use
7.06.0
-0.3
11.1
-12
-6
0
6
12
00 01 02 03 04 05 06 07 08 09 10
World Mill Use Rebounding
3% GDP
5% GDP
% Change in Mill Use
-0.2-10.0
-12
-6
0
6
12
00 01 02 03 04 05 06 07 08 09 10
World Mill Use Rebounding
3% GDP
5% GDP
-1% GDP
% Change in Mill Use
3.1 2.3
-12
-6
0
6
12
00 01 02 03 04 05 06 07 08 09 10
World Mill Use Rebounding
3% GDP
5% GDP
-1% GDP
4% GDP
Million Bales
117.3114.6
0
20
40
60
80
100
120
140
00 01 02 03 04 05 06 07 08 09 10
World Cotton Mill Use
Cotton Mill Use (Mil Bales)
07/08 08/09 09/10 10/11
China 51.5 45.0 46.8 48.0
India 18.6 17.9 18.8 19.3
Pakistan 12.0 11.5 12.1 12.5
Other Int’l 36.8 33.1 33.5 34.0
Million Bales
3.43.4
0
2
4
6
8
10
00 01 02 03 04 05 06 07 08 09 10
US Cotton Mill Use
Cotton Futures (Cents/Lb)
40
50
60
70
80
90
Aug Sep Oct Nov Dec Jan Feb Apr May Jun Jul
Dec 09 Dec 10
Prices Encouraging Acres
US Acreage Intentions
2009 2010%
Change
Southeast 1,891 2,123 12.2
Mid-South 1,627 1,764 8.4
Southwest 5,243 5,718 9.1
West 247 312 26.6
All Upland 9,008 9,916 10.1
ELS 142 176 24.4
US Cotton 9,149 10,093 10.3
Million Bales
12.4
15.5
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10
US Cotton Production
Million Tons
4.2
5.2
0
2
4
6
8
10
00 01 02 03 04 05 06 07 08 09 10
US Cottonseed Production
Million Acres
0
5
10
15
20
25
30
35
China
04-07 08 09 10f
Int’l Cotton Area
Million Acres
0
5
10
15
20
25
30
35
China India
04-07 08 09 10f
Int’l Cotton Area
Million Acres
0
5
10
15
20
25
30
35
China India Other N Hem
04-07 08 09 10f
Int’l Cotton Area
Million Acres
0
5
10
15
20
25
30
35
China India Other N Hem S Hem
04-07 08 09 10f
Int’l Cotton Area
Million Bales
102.7
113.9
0
20
40
60
80
100
120
140
00 01 02 03 04 05 06 07 08 09 10
Increased World Production
Million Bales
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10
Cotton Imports
China
All Others
Million Bales
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10
Cotton Imports
China
All Others
Million Bales
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10
Cotton Imports
China
All Others
Million Bales
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10
Cotton Exports
US
All Others
Million Bales
11.6
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10
Cotton Exports
US
All Others
Million Bales
12.1
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07 08 09 10
Cotton Exports
US
All Others
World Balance Sheet*
08/09 09/10 10/11 Change
Production 107.5 102.7 113.9 11.2
Mill Use 111.1 114.6 117.3 2.7
Trade 30.2 34.2 35.6 1.4
Stocks 60.9 51.5 50.6 -0.9
* Unaccounted of -2.5 million bales
US Balance Sheet
08/09 09/10 10/11 Change
Production 12.8 12.4 15.5 3.1
Mill Use 3.6 3.4 3.4 0.0
Exports 13.3 11.6 12.1 0.5
Stocks 6.3 3.7 3.7 0.0
Percent
23.624.4
35.238.2
0
20
40
60
80
100
00 01 02 03 04 05 06 07 08 09 10
Stocks-to-Use Tightening
China
US
Cents/Lb
40
50
60
70
80
90
100
Aug-06 Jan-07 Jul-07 Jan-08 Jul-08 Dec-08 Jun-09 Nov-09
Cotton “A” Index
Percent & Cents/Lb
43%45%
30
40
50
60
70
80
90
100
92 94 96 98 00 02 04 06 08 10
Stocks-to-Use vs Price
A Index
Stocks-to-Use
Issues to Watch• US export pace and 09/10 ending
stocks
• China and India production
• Can consumer spending sustain recovery?
• US $ and commodity prices
