World situation - 1991/92 world cotton production, consumption, prices, forecasts - U.S. Dept. of Agriculture, Economic Research Service report

World cotton production in 1991/92 is projected at a record 92.2 million bales. This estimate is up 0.4 million bales from last month and up 6 percent from 1990/91. Total foreign production is projected at 74.7 million bales up 0.4 million from last month and is an increase of 4 percent over 1990/91. U.S. production is estimated at 17.5 million bales, unchanged from last month. World cotton consumption for MY 1991/92 is forecast at 85.6 million bales, a 540,000-bale decrease from January's estimate. The largest reductions were made in Turkey and the former Soviet Union. Consumption was lowered in both areas by 300,000 bales each, to 2.3 million and 8.2 million bales, respectively. Recent political and economic changes in the former Soviet Union have created uncertainty and a slowdown in cotton textile activity. The cotton consumption estimate in Turkey decreased due to an increase in cheaper yarn and fabric imports. Conversely, the consumption estimate increased 100,000 bales in Pakistan due to a dramatic increase in cotton production which is stimulating increased textile activity. World cotton exports for MY 1991/92 are forecast at 22.9 million bales, nearly 200,000 bales below the previous month's estimate. The U.S. export estimate remains at 6.8 million bales. Large downward revisions in the export estimates for the former Soviet Union and Turkey were less than offset by increases for Pakistan, China, and Australia. The large decline in exports from the former Soviet Union is due to bottlenecks at ports which are interfering with cotton shipments, while the increase for Pakistan is due primarily to a larger-than-expected cotton crop. U.S. cotton exports for November 1991 were 581,000 bales, 123 percent higher than exports reported in October 1991 but 19 percent lower than in November 1991, according to the U.S. Bureau of the Census. The leading markets were Japan, Korea, Indonesia, and China. Cumulative exports for August through November 1991 were 1.2 million bales, 42 percent lower than the same period last year. World ending stocks for MY 1991/92 are projected at nearly 35.0 million bales, nearly 3 percent above last month's projection. Major increases were noted for Pakistan, Turkey, and the former Soviet Union. In the former Soviet Union, stocks increased 1.0 million bales primarily due to lower consumption and export prospects. Stocks in Pakistan increased 272,000 bales due to a substantial increase in production; and stocks increased 207,000 bales in Turkey due to reduced consumption and export opportunities. Downward revisions were made in stock estimates for Argentina, Australia, China, India, and South Africa. The largest downward adjustment was made for China, where stocks were lowered 300,000 bales on account of reduced import needs. International cotton prices fell steeply throughout January under the accumulated pressure of large uncommitted stocks in the former Soviet Union, Paraguay, and Argentina; stagnant cotton textile demand in Europe; and, a larger-than-expected Chinese cotton crop. Cotlook, Ltd.'s A-Index of Northern European price quotes fell from a weekly average of 61.21 cents per pound on January 2 to 57.53 cents on January 30. Prices have fallen steadily from a weekly average of 77.95 cents per pound since the beginning of the marketing year on August 1, 1991 (see chart 1 on page 52). Central Asian began the month as the lowest cotton quote, but relinquished the lowest position to the Paraguayan quote on January 27. The Memphis Territory quote fell to a weekly average of 59.65 cents per on January 30 from 63.44 cents on January 2. Contract prices on the New York Cotton Exchange also fell steeply throughout the month. The March contract began the month at 59.58 cents per pound on January 2, and fell to 53.06 cents by January 31. The May contract also fell from 61.08 cents per pound to 55.03 cents during the same period. [Table 2 Omitted]

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