World situation - cotton production and prices - U.S. Dept. of Agriculture, Foreign Agricultural Service report

World cotton production in 1991/92 is projected to be a record 95.4 million bales. This is down less than 1 percent from last month. Total foreign production is expected to decrease 98,000 bales to a record 77.8 million bales, down less than 1 percent from last month, and an increase of 9 percent over 1990/91. U.S. and foreign production highlights are as follows:

-- United States production is estimated at 17.5 million bales, unchanged from last month, but up 13 percent from last year.

-- Cotton production in Brazil is estimated at 3.6 million bales, a decline of 5 percent from last month. However, despite increased production over last year's drought reduced levels, the 1991/92 center-south crop is lower than initially estimated.

--Pakistan's cotton production is estimated at a record 10.0 million bales, up 3 percent from last month, and 33 percent from last year. Record yields and increased area in both the Sind and Punjab Provinces reflect an unusually long and dry harvest period, and increased use of high yielding varieties.

-- Zimbabwe's cotton production is estimated at 145,000 bales, down 52 percent from last month, and 60 percent from last year. Area and yield estimates were lowered due to widespread drought. World cotton consumption for MY 1991/92 is expected to reach 85.8 million bales, a slight decrease from March's forecast, primarily due to decreased mill activity in India, South Korea, and Spain. Conversely, increased mill activity, and continued increases in cotton's share of total fiber consumption, are driving the consumption forecast for the United States upward by 100,000 bales. U.S. cotton exports for January 1992 were 875,000 bales, 11 percent higher than exports reported in January 1991, according to the U.S. Bureau of the Census. The leading markets during January 1992 were China, Indonesia, Japan, and South Korea. Cumulative exports for the current marketing year, August through January 1991, were 2.9 million bales, or 25 percent less than for the same period last year. World cotton exports for MY 1991/92 are forecast at 22.8 million bales, or 99,000 bales below last month's projection. The major downward adjustment in the export projection is noted for Brazil where a sizable decrease in cotton production is limiting export potential. The export projection for the United States remains unchanged at 6.8 million bales. World ending stocks for MY 1991/92 are projected at 38.1 million bales, 230,000 bales above last month's projection. Upward adjustments were made in the ending stock forecasts for India, Italy, Pakistan, and South Korea. Projected stocks in India increased by 100,000 bales, due to a reduction in the consumption forecast. Stock projections in Italy and South Korea were increased in MY 1991/92 to reflect imports that were not fully utilized last year. The ending stock forecast in Pakistan increased 250,000 bales as a result of larger production. Somewhat offsetting decreases in stocks are projected for China and the United States this month. Projected stocks decreased 100,000 bales in both China and the United States due to a decrease in imports and increased consumption, respectively. International cotton prices fell slightly in March. Cotlook Ltd.'s A-Index of c.i.f. northern European price quotes fell from a weekly average of 56.11 cents per pound on March 5 to 55.58 cents per pound on March 26. Apparently, the sharp, steady declines that characterized January and February subsided in March. Central Asian remains the lowest quote. The next two lowest quotes are Paraguayan and Pakistani. In contrast, the Memphis Territory quote rose slightly during the same period, adding to the widening gap between U.S. and competitor prices. Another important price development in March was Cotlook's Ltd. release of quotes for the upcoming 1992/93 crop as a feature of its "dual index" system. These "forward" quotes describe cotton to be shipped from northern Hemisphere producers to northern Europe in November 1992 through February 1993. Forward shipment quotes are currently several cents per pound higher than current quotes. The forward A-index reached an average of 62.48 cents per pound for the week ending April 2. This is almost 7 cents above the current A-Index price. Futures contract prices on the New York Cotton Exchange changed slightly during March. The March contract decreased from 63.25 cents per pound on March 2 to 63.20 cents per pound on March 31. The May contract rose from 63.75 cents per pound on March 2 to 63.77 cents per pound on March 31.

COPYRIGHT 1992 U.S. Department of Agriculture
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