Download - U.S. and World Cotton Economic Outlook April 2008 Prepared by: Economic Services National Cotton Council.

U.S. and World Cotton U.S. and World Cotton Economic OutlookEconomic Outlook

April 2008April 2008

Prepared by:Prepared by:

Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council

U.S. and World Cotton U.S. and World Cotton Economic OutlookEconomic Outlook

April 2008April 2008

Prepared by:Prepared by:

Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council

Macroeconomic Macroeconomic EnvironmentEnvironment

U.S. Real GDP GrowthU.S. Real GDP Growth

Percent

-2

0

2

4

6

8

10

97 98 99 00 01 02 03 04 05 06 07

Dollars per Barrel

30

40

50

60

70

80

90

100

110

120

Jan

-04

Feb

-04

Mar

-04

May

-04

Jun

-04

Jul-

04S

ep-0

4O

ct-0

4D

ec-0

4Ja

n-0

5F

eb-0

5A

pr-

05M

ay-0

5Ju

l-05

Au

g-0

5S

ep-0

5N

ov-

05D

ec-0

5Ja

n-0

6M

ar-0

6A

pr-

06Ju

n-0

6Ju

l-06

Au

g-0

6O

ct-0

6N

ov-

06Ja

n-0

7F

eb-0

7A

pr-

07M

ay-0

7Ju

n-0

7A

ug

-07

Sep

-07

No

v-07

Dec

-07

Feb

-08

Mar

-08

U.S. Crude Oil Spot Price U.S. Crude Oil Spot Price

Cents per Gallon

80

110140

170

200230

260

290

320350

380

Jan

-04

Feb

-04

Mar

-04

May

-04

Jun

-04

Au

g-0

4S

ep-0

4N

ov-

04D

ec-0

4F

eb-0

5M

ar-0

5A

pr-

05Ju

n-0

5Ju

l-05

Sep

-05

Oct

-05

No

v-05

Jan

-06

Feb

-06

Ap

r-06

May

-06

Jul-

06A

ug

-06

Oct

-06

No

v-06

Dec

-06

Feb

-07

Mar

-07

May

-07

Jun

-07

Au

g-0

7S

ep-0

7O

ct-0

7D

ec-0

7Ja

n-0

8M

ar-0

8

U.S. #2 Diesel, Gulf Coast U.S. #2 Diesel, Gulf Coast

Percent

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

97 98 99 00 01 02 03 04 05 06 07 08

Percent

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

97 98 99 00 01 02 03 04 05 06 07 08

Civilian Unemployment RateCivilian Unemployment Rate

$ Billions

-400

-300

-200

-100

0

100

200

08 09 10 11 12 13 14 15 16 17

Aug-07 Mar-08

U.S. Federal Budget SurplusU.S. Federal Budget Surplus(CBO Projection)(CBO Projection)

$ Billion

0

5

10

15

20

25

30

04 06 08 10 12 14 16 18

Upland Cotton Other Commodity Programs Conservation

$ Billion

0

5

10

15

20

25

30

04 06 08 10 12 14 16 18

Upland Cotton Other Commodity Programs Conservation

CBO Ag Baseline SpendingCBO Ag Baseline Spending

Percent

0

2

4

6

8

10

12W

orld US

Indi

a

Chi

na

2006 2007 2008 2009

Percent

0

2

4

6

8

10

12W

orld US

Indi

a

Chi

na

2006 2007 2008 2009

Real GDP GrowthReal GDP Growthin Selected Countriesin Selected Countries

0.55

0.65

0.75

0.85

0.95

1.05

1.15

1.25

Jan

-97

Jul

Jan

-98

Jul

Jan

-99

Jul

Jan

-00

Jul

Jan

-01

Jul

Jan

-02

Jul

Jan

-03

Jul

Jan

-04

Jul

Jan

-05

Jul

Jan

-06

Jul

Jan

-07

Jul

Jan

-08

EuroEuro(Currency per U.S. Dollar)(Currency per U.S. Dollar)

100

105

110

115

120

125

Jan

-01

Mar

May Ju

lS

epN

ov

Jan

-02

Mar

May Ju

lS

epN

ov

Jan

-03

Mar

May Ju

lS

epN

ov

Jan

-04

Mar

May Ju

lS

epN

ov

Jan

-05

Mar

May

July

Sep

No

vJa

n-0

6M

arM

ay Jul

Sep

No

vJa

n-0

7M

arM

ay Jul

Sep

No

vJa

n-0

8M

ar

Real Exchange Rate Index Real Exchange Rate Index (Other Important Trade Partners, Source – Federal Reserve )(Other Important Trade Partners, Source – Federal Reserve )

80

90

100

110

120

130

140

150

160

170

180

Jan

-95

Jul

Jan

-96

Jul

Jan

-97

Jul

Jan

-98

Jul

Jan

-99

Jul

Jan

-00

Jul

Jan

-01

Jul

Jan

-02

Jul

Jan

-03

Jul

Jan

-04

Jul

Jan

-05

Jul

Jan

-06

Jul

Jan

-07

Jul

Jan

-08

Crops Livestock

Ag Prices Received Index Ag Prices Received Index

$ Billion

0

10

20

30

40

50

60

70

80

90

100

99 00 01 02 03 04 05 06 07f 08f

Market Government Emergency

U.S. Net Farm IncomeU.S. Net Farm Income

U.S. Cotton SupplyU.S. Cotton Supply

40

50

60

70

80

90

100

110

Au

g

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Dec 07 Dec 08

40

50

60

70

80

90

100

110

Au

g

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Dec 07 Dec 08

December Cotton FuturesDecember Cotton FuturesCents per Pound

275300325350375400425450475500525550575600625650675700

Au

g

Se

p

No

v

Fe

b

Ap

r

Ju

n

Au

g

Oc

t

De

c

Dec 07 Dec 08

275300325350375400425450475500525550575600625650675700

Au

g

Se

p

No

v

Fe

b

Ap

r

Ju

n

Au

g

Oc

t

De

c

Dec 07 Dec 08

December Corn FuturesDecember Corn FuturesCents per Bushel

580

680

780

880

980

1080

1180

1280

1380

1480

1580

1680

Au

g

Se

p

No

v

Fe

b

Ap

r

Ju

n

Au

g

Oc

t

Nov 07 Nov 07

580

680

780

880

980

1080

1180

1280

1380

1480

1580

1680

Au

g

Se

p

No

v

Fe

b

Ap

r

Ju

n

Au

g

Oc

t

Nov 07 Nov 07

November Soybean FuturesNovember Soybean FuturesCents per Bushel

SoutheastSoutheast 2,255 2,255 2,022 2,022 -10.3-10.3Mid-SouthMid-South 2,750 2,750 1,960 1,960 -28.7 -28.7 SouthwestSouthwest 5,122 5,122 4,935 4,935 -3.7 -3.7 WestWest 411 411 269 269 -34.5 -34.5

ALL UPLANDALL UPLAND 10,53810,538 9,1869,186 -12.8-12.8

ALL ELSALL ELS 292 292 204 204 -30.3 -30.3

ALL COTTONALL COTTON 10,830 10,830 9,390 9,390 -13.3-13.3

SoutheastSoutheast 2,255 2,255 2,022 2,022 -10.3-10.3Mid-SouthMid-South 2,750 2,750 1,960 1,960 -28.7 -28.7 SouthwestSouthwest 5,122 5,122 4,935 4,935 -3.7 -3.7 WestWest 411 411 269 269 -34.5 -34.5

ALL UPLANDALL UPLAND 10,53810,538 9,1869,186 -12.8-12.8

ALL ELSALL ELS 292 292 204 204 -30.3 -30.3

ALL COTTONALL COTTON 10,830 10,830 9,390 9,390 -13.3-13.3

2008 U.S. Planting Intentions2008 U.S. Planting Intentions

20072007 20082008 %% Actual Actual Intended* Intended* ChangeChange

20072007 20082008 %% Actual Actual Intended* Intended* ChangeChange

Thousand AcresThousand AcresThousand AcresThousand Acres

*2008 NASS Prospective Plantings Report *2008 NASS Prospective Plantings Report

Million Bales

0

4

8

12

16

20

24

28

95 96 97 98 99 00 01 02 03 04 05 06 07e 08f*

U.S. Cotton ProductionU.S. Cotton Production

* USDA 2008 Ag Outlook Forum Estimates* USDA 2008 Ag Outlook Forum Estimates

Million Bales

0

5

10

15

20

25

30

35

95 96 97 98 99 00 01 02 03 04 05 06 07e 08f*

Beg Stocks Imports Production

U.S. Cotton SupplyU.S. Cotton Supply


U.S. Cotton DemandU.S. Cotton Demand

Million Bale Equivalents

0

10

20

30

40

50

60

97 98 99 00 01 02 03 04 05 06 07 08f

Cotton Other

Net Domestic Fiber ConsumptionNet Domestic Fiber Consumption

Percent

38

39

40

41

42

43

44

45

97 98 99 00 01 02 03 04 05 06 07

Percent

38

39

40

41

42

43

44

45

97 98 99 00 01 02 03 04 05 06 07

Cotton’s Share of Fiber ConsumptionCotton’s Share of Fiber Consumption


0

4

8

12

16

20

24

28

97 98 99 00 01 02 03 04 05 06 07 08f

Retail Imported

Components of Retail Cotton Components of Retail Cotton ConsumptionConsumption


0

5

10

15

20

25

97 98 99 00 01 02 03 04 05 06 07 08f


0

5

10

15

20

25

97 98 99 00 01 02 03 04 05 06 07 08f

U.S. Cotton Textile ImportsU.S. Cotton Textile Imports

U.S. Cotton Content in Textile ImportsU.S. Cotton Content in Textile ImportsMillion Bale Equivalents

0

3

6

9

12

15

18

21

24

97 98 99 00 01 02 03 04 05 06 07

Non-U.S. Cotton ROW NAFTA CBI


0

3

6

9

12

15

18

21

24

97 98 99 00 01 02 03 04 05 06 07

Non-U.S. Cotton ROW NAFTA CBI

U.S. Trade With MexicoU.S. Trade With MexicoMillion Bales

0

1

2

3

4

97 98 99 00 01 02 03 04 05 06 07

Imports Exports

Million Bales

0

1

2

3

4

97 98 99 00 01 02 03 04 05 06 07

Imports Exports

U.S. Trade with CBIU.S. Trade with CBIMillion Bales

0

1

2

3

4

97 98 99 00 01 02 03 04 05 06 07

Imports Exports

Million Bales

0

1

2

3

4

97 98 99 00 01 02 03 04 05 06 07

Imports Exports

U.S. Imports from ChinaU.S. Imports from ChinaMillion Bales

0

1

2

3

4

5

6

97 98 99 00 01 02 03 04 05 06 07

Million Bales

0

1

2

3

4

5

6

97 98 99 00 01 02 03 04 05 06 07

U.S. Textile and Apparel Imports from ChinaU.S. Textile and Apparel Imports from China(All Fibers)(All Fibers)

Billion SMEs

0

5

10

15

20

25

00 01 02 03 04 05 06 07

Agreement Categories

Non-Agreement Categories

Billion SMEs

0

5

10

15

20

25

00 01 02 03 04 05 06 07

Agreement Categories

Non-Agreement Categories

U.S. Cotton Mill UseU.S. Cotton Mill Use(Calendar Year, Million Bales)(Calendar Year, Million Bales)

Million Bales

0

2

4

6

8

10

12

97 98 99 00 01 02 03 04 05 06 07 08f

*National Cotton Council Forecast*National Cotton Council Forecast

U.S. Cotton Mill UseU.S. Cotton Mill Use(Crop Year, Million Bales)(Crop Year, Million Bales)

Million Bales

0

2

4

6

8

10

12

97 98 99 00 01 02 03 04 05 06 07e 08f**USDA 2008 Ag Outlook Forum Estimates*USDA 2008 Ag Outlook Forum Estimates

Million Bales

0

5

10

15

20

25

30

97 98 99 00 01 02 03 04 05 06 07e 08f*

Exports Mill Use Production

U.S. Cotton Production & Use


The World Market The World Market & U.S. Cotton Exports& U.S. Cotton Exports

Million Bales

-10

0

10

20

30

40

50

60

70

97 98 99 00 01 02 03 04 05 06 07e 08f*

Net Imports Production Use Stocks

Million Bales

-10

0

10

20

30

40

50

60

70

97 98 99 00 01 02 03 04 05 06 07e 08f*

Net Imports Production Use Stocks

China Cotton Supply & UseChina Cotton Supply & Use


World Cotton ProductionWorld Cotton ProductionMillion Bales

0

25

50

75

100

125

97 98 99 00 01 02 03 04 05 06 07e 08f*

Million Bales

0

25

50

75

100

125

97 98 99 00 01 02 03 04 05 06 07e 08f*


Million Bales

0

20

40

60

80

100

120

140

160

96 97 98 99 00 01 02 03 04 05 06 07e

Cotton Polyester

Million Bales

0

20

40

60

80

100

120

140

160

96 97 98 99 00 01 02 03 04 05 06 07e

Cotton Polyester

World Fiber Mill UseWorld Fiber Mill Use

*PCI

Cents per Pound

30

40

50

60

70

80

90

Jan

-04

Ap

r-04

Au

g-0

4

No

v-04

Mar

-05

Jun

-05

Sep

-05

Jan

-06

Ap

r-06

Au

g-0

6

No

v-06

Mar

-07

Jun

-07

Oct

-07

Jan

-08

"A" FE Index

Asian Polyester Staple

Fiber PricesFiber Prices

World Cotton Mill UseWorld Cotton Mill Use

Million Bales

0

20

40

60

80

100

120

140

97 98 99 00 01 02 03 04 05 06 07e 08f*

Million Bales

0

20

40

60

80

100

120

140

97 98 99 00 01 02 03 04 05 06 07e 08f*


Million Bales

50

60

70

80

90

100

110

120

130

97 98 99 00 01 02 03 04 05 06 07e 08f*

Production Use

Million Bales

50

60

70

80

90

100

110

120

130

97 98 99 00 01 02 03 04 05 06 07e 08f*

Production Use

Foreign Cotton Production & UseForeign Cotton Production & Use


U.S. Cotton ExportsU.S. Cotton ExportsMillion Bales

0

2

46

8

10

12

1416

18

20

97 98 99 00 01 02 03 04 05 06 07e 08f*

Million Bales

0

2

46

8

10

12

1416

18

20

97 98 99 00 01 02 03 04 05 06 07e 08f*


World Cotton Ending StocksWorld Cotton Ending Stocks

Million Bales

0

10

20

30

40

50

60

70

97 98 99 00 01 02 03 04 05 06 07e 08f*

U.S. ROW China

Million Bales

0

10

20

30

40

50

60

70

97 98 99 00 01 02 03 04 05 06 07e 08f*

U.S. ROW China


39 4144

60

37

44

53

43

58 6056

0

10

20

30

40

50

60

70

80

97 98 99 00 01 02 03 04 05 06 07e

Percent

39 4144

60

37

44

53

43

58 6056

0

10

20

30

40

50

60

70

80

97 98 99 00 01 02 03 04 05 06 07e

Percent

Cotton Stocks/UseCotton Stocks/Use (World less China)(World less China)

U.S. Supply and DemandU.S. Supply and DemandMillion BalesMillion Bales

Beginning Stocks 9.48 9.70Production 19.40 15.00Imports 0.02 0.00

Total Supply 28.89 24.70

Mill Use 4.70 4.50Exports 14.50 15.00

Total Offtake* 19.20 19.50

Ending Stocks 9.70 5.20Stocks-to-Use Ratio 50.5% 26.7%

2007/08 2008/09**

**USDA 2008 Ag Outlook Forum Estimates**USDA 2008 Ag Outlook Forum Estimates*Includes Unaccounted*Includes Unaccounted

Beginning Stocks 61.20 59.64Production 119.73 123.00Imports 39.09 43.10

Mill Use 124.94 129.50Exports 38.94 42.70

Ending Stocks 59.64 57.04Stocks-to-Use Ratio 47.7% 44.0%

World Supply and DemandWorld Supply and DemandMillion BalesMillion Bales

2007/08 2008/09*


MerchantsMerchantsGinnersGinners CottonseedCottonseed

ProducersProducers

CooperativesCooperatives

WarehousesWarehousesManufacturersManufacturers