USA: Cotton Production Will Fall Below 1994 Record, Says USDA
The August forecast is also below industry expectations that averaged nearly 19.4 million bales. Upland production is forecast at 18.7 million bales, the highest since 1994, while the extra-long staple (ELS) crop is projected at only 419,000 bales, 40 pe rcent below last season and the lowest since 1995. Past differences between the August forecast and the final production estimate indicate that chances are two out of three for the 2000 US cotton crop to range between 17.6 and 20.8 million bales.
Compared with last season, upland production is projected to rise in each region of the Cottonbelt. The largest increase, however, is anticipated for the Delta, where production is expected to increase by 763,000 bales (15 per cent) this season to 5.9 million. Similarly, the Southeast is projected to expand 689,000 bales (19 per cent) to 4.2 million. If realized, production in each of these regions would be the largest output since 1996.
In the Southwest, upland production is forecast to increase 565,000 bales (11 per cent) to nearly 5.8 million, the largest since 1981. The region is led by Texas which accounts for 5.5 million of the total upland output. With dry conditions in various parts of the State, abandonment in Texas is projected at 16 per cent. However, a yield of 498 pounds per harvested acre is projected to provide the largest crop in nearly two decades.
In the West, upland production is projected to rise 430,000 bales (18 per cent) to 2.8 million bales. With a larger area planted in high-yielding California, the region's yield is forecast at 1,205 pounds per harvested acre, the highest since 1993. On the other hand, ELS production in the West is expected to decline more than 200,000 bales as better prospects moved nearly 100,000 acres to upland production this season. California continues to take the lead in ELS production and is projected to account for 88 per cent of the ELS crop in 2000.
Total planted area to cotton is estimated at 15.5 million acres, and abandonment is projected close to the 10-year average at 8.7 per cent. As a result, cotton area to be harvested is forecast at 14.2 million acres, 6 per cent above last season and the highest since 1995/96. Based on the harvested area, the national yield is estimated at 648 pounds per acre, 41 pounds above 1999/2000 and 19 pounds above the 5-year average.
Despite recent declines, overall US cotton crop conditions remain similar to a year ago. As of August 6, 53 per cent of the cotton acreage was in good or "excellent" condition, compared with only 51 per cent in 1999. Similarly, 18 per cent of the crop is rated "poor" or "very poor" this season, compared with 17 per cent in 1999. While crop conditions are slightly better than last season, this year's crop development has surpassed that of 1999. As of August 6, 86 per cent of the cotton area was setting bolls with 8 per cent having bolls opening. In 1999, these percentages were 84 and 6 per cent, respectively. As a result of an early start this season, ginnings are also reported higher than a year ago. As of August 1, about 245,000 running bales had been ginned, compared with only 81,000 at this time last year and above the 146,000 bales ginned in 1998.
US Demand and Stocks To Rise This Season
Based on the August production forecast and carryin stocks estimated at 4.1 million bales, total US cotton supplies for 2000/01 are projected to rise 11 per cent to 23.3 million. Meanwhile, total use of US cotton is also projected to increase, but not as fast as production. In 2000/01, total US cotton demand is forecast to reach 18.4 million bales, 9 per cent above last season and the highest since 1997/98.
Despite the abundant supply expectations this season, US cotton mill use is projected to improve only slightly. US mill use is currently estimated at 10.2 million bales, marginally above the 10.1 million for 1999/2000. While demand for all fibres is expected to grow this year, the level of cotton textile trade will play a crucial role in the amount of raw cotton consumed by US mills. Exports, on the other hand, are expected to expand further in 2000/01. US exports are forecast at 8.2 million bales, 21 per cent above last season, and the largest shipment rate since 1994.
With these US supply and demand projections, cotton ending stocks for 2000/01 are projected to jump 800,000 bales from the beginning level to 4.9 million. As a result, the implied stocks-to-use ratio for the season is currently near 27 per cent, about equal to that of 1998/99.
Foreign Consumption Higher, 2000/01 Beginning and Ending Stocks Lower
USDA's forecast of foreign cotton consumption in 2000/01 was raised in August, up 200,000 bales from the previous month, to 82.3 million bales. Larger, but essentially offsetting, month-to-month declines occurred in the forecasts of 2000/01 foreign cotton imports--down about 550,000 bales--and cotton exports--down about 450,000 bales. Foreign imports in 2000/01 are forecast at 28 million bales, and foreign exports at 19.4 million. There was little change in the forecast for foreign production, forecast 80,000 bales higher than during the month before, at 68.2 million bales. Foreign ending stocks in 2000/01 are forecast 800,000 bales lower in August than during the month before, at 30.3 million bales.
Foreign production in 2000/01 is forecast at about the same level it was a month earlier, as smaller expected crops in Central Asia largely offset improved Southern Hemisphere prospects. Reports from Central Asia indicate that the volume of water available in the Syr Darya and Amu Darya Rivers is its smallest in decades, necessitating reduced irrigation applications in some parts of Uzbekistan, Turkmenistan, and Kazakhstan. With expected 2000/01 output in these countries reduced this month, Central Asia's output forecast fell 440,000 bales from the month before. With reduced prospective supplies available for export, Central Asia's 2000/01 export forecast fell about 400,000 bales.
Mali's expected 2000/01 crop was also reduced this month, by 150,000 bales to 800,000 bales. USDA's forecast for total production in West Africa's Franc Zone in 2000/01 is now marginally below 1999/2000's estimated level of 4 million bales. Relatively low world cotton prices during the last 2 years have resulted in financing difficulties in the region and difficulties in assuring timely and renumerative purchases from farmers in several countries in sub-Saharan Africa.
On the other hand, recent events in Brazil and Australia suggest better prospects for their as yet unplanted 2000/01 crops than expected a month earlier. An unexpectedly good finish to Australia's 1999/2000 crop resulted in a 100,000-bale increase in last year's estimated output, for a record 3.3-million-bale crop. Similarly, Brazil's 1999/2000 area and yield were adjusted upward, raising production 200,000 bales to 2.9 million. In each case, higher yields in 1999/2000 have suggested better yields are likely in 2000/01, and higher area as well is expected in Brazil, due partly to depressed soybean prices. Brazil's 2000/01 expected output was increased 300,000 bales, and Australia's 100,000 bales.
Brazil's 2000/01 cotton output is now forecast to rise 300,000 bales from the year before, to 3.2 million bales. This would be the largest crop since 1991/92, and an increase of nearly 2 million bales since the 1996/97 crop. Brazil's production fell early in the 1990's as economic reforms reduced trade protection and support for agriculture. The advent of the Mercosur regional trade agreement, economic recovery in Brazil, and the opening of new production areas in the state of Mato Grosso have helped drive a revival in production. With larger production, Brazil's imports have fallen from a peak of 2.4 million bales in 1996/97 to 1.3 million bales in 1999/2000. The forecast for imports in 2000/01 was reduced 300,000 bales in August, to 1.2 million bales.
Foreign consumption in 2000/01 is forecast slightly higher than a month earlier in August as increases in China, Syria, and Taiwan offset reduced consumption prospects in Indonesia, Romania, and a few other countries. In each case, the revised forecasts resulted from adjustments in consumption in earlier years. In the case of Syria, adjustments stretched back to 1995/96.
Foreign beginning stocks in 2000/01 were reduced from the month before by about 600,000 bales. The historical revisions in Syria accounted for 300,000 bales, and increased 1999/2000 consumption and exports by China accounted for 350,000 bales. Expected foreign ending stocks were reduced 800,000 bales from the month before in August, to 30.2 million bales, their lowest since 1994/95.
US exports in 2000/01 continue to be forecast at 8.2 million bales, unchanged from July's estimate. With little month-to-month change in expected net foreign trade, and little change in US export availability compared with the previous month, and export sales to date accounting for such a small share of likely exports, there was little reason to revise the outlook. However, with a lower forecast for 2000/01 total world trade this month, the expected US trade share rose marginally, from 29.2 per cent to 29.7 per cent.
Textile Imports Rise in May
May textile imports, at 1.1 billion pounds (raw-fiber equivalent), rebounded from a month earlier and were 27 per cent above a year ago. Imports of all fibres and all end-use categories increased from a month earlier. Cotton textile imports, at 621 million pounds, were 15 per cent above April and 27 per cent above a year ago. Cotton apparel imports accounted for 70 per cent of the shipments in May. Cotton imports from Asia rose to 275 million pounds, up 14 per cent from a month earlier.
Textile exports declined in May for the second consecutive month to 428 million pounds. Total May exports were 2 per cent below April but 9 per cent above a year earlier. Exports of all major fibres and all end-use categories except home furnishings were lower than April shipments. Cotton textile exports, at 194 million pounds, were 1 per cent below a month earlier. However, cotton shipments were 8 per cent above May 1999. Cotton textile exports to North America at 177 million pounds, decreased slightly from a month earlier.
Overall, the May textile trade deficit was 674 million pounds, with cotton accounting for 63 per cent of the total. The May deficit increased 42 per cent from a year earlier when it totaled 474 million pounds. In addition, the deficit for the first 5 months of 2000 was 3.1 billion pounds, compared with 2.6 billion a year ago. The cotton trade deficit reached 2.0 billion pounds (4.1 million bale equivalents) during January-May, up 18 per cent from 1999.
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