The economist’s tea leaves say….

“Give me a one-armed economist!” That was the exasperated plea of former U.S. President Harry Truman in the late 1940s. Truman grumbled that whenever his economists advised him, they would inevitably say, “On the one hand…but, on the other…,” accounting for the ambiguities of economic indicators.

The Nobel-Prize-winning Irish playwright, G. Bernard Shaw, said, “If all economists were laid end to end, they would not reach a conclusion.”

Economic prognosticators, who are really interpreting and predicting collective human behavior, infamously rely on their simplifying assumptions. An economist may assume an efficiently-functioning free market, characterized by “perfect information” for all players. He is also apt to freeze certain economic elements to isolate the effects of specific forces, assuming “ceteris paribus” (all else being constant).

Of course, no one has perfect information, free and efficient markets don’t exist, and innumerable simultaneous forces influence human economic behavior. All of that conspires to confound economic predictions – whether about the global economy or the future price of cotton in Karachi.

On the one hand, certain signs clearly point toward economic recovery and a more robust cotton market. In the U.S., the world’s largest consumer economy, employment has grown in each of the first four months of 2010, returning more than 500,000 jobs to an economy that had lost 3.5 million. In April, U.S. manufacturing experienced its greatest growth in six years. In March, major U.S. clothing retail chains saw their sales jump a surprising 12 to 24% compared to March of 2009. The economies of China and India both grew by almost 9% last year and are heating up in 2010. China may well raise its cotton-import quota by 60%, to 3 million tons.

On the other hand, fears abound that the debt crisis in Greece could ripple through Europe and the world and reverse a fragile economic recovery. That, and an apparent glitch in high-speed computer trading, caused U.S. stocks to lose more than $1 trillion in value on one May afternoon. To support its own textile industry, the Indian government suspended India’s exports of raw cotton and yarn.

All told, projections are for healthy growth in cotton trading this year, with 114 million bales of production worldwide (25M MT), up from 102 million bales (22M MT) in ’09/’10.  Pent-up demand for cotton goods appears to be breaking through the logjam as the global economy begins its swing in a positive direction.

But just keep in mind the words of my favorite economist, John Kenneth Galbraith: “Economics is extremely useful…as a form of employment for economists.”

Leave a Reply

Marketing Stories

Market Analysis

Sleepy Market Hiding Potential Volatility

October 20, 2014

Cotton trading remains locked in a rather wide ten cent trading channel, but actively trading only a four cent band around 63 cents – 61 to 65 cents, that is. In other words, maybe we are being lulled to sleep.

Market Analysis

Shurley on Cotton: Fragile Market Shows Improvement, Outlook Still Cautious

October 11, 2014

After recently falling to the 61-cent level, prices have made a modest, but still welcomed, recovery.

Marketing

U.S. Loan Program Could Take Price Pressure Off of Cotton Farmers

October 7, 2014

With cotton prices sitting below the threshold that triggers government loan repayment assistance, the pressure for growers to move their cotton to market after harvest may be reduced.

Market Analysis

Chinese Government Now a Marketplace Fundamental

October 6, 2014

The more things change, the more they stay the same. But through their recent actions, the primary fundamental in the marketplace has now become the Chinese government.

International

Plexus: Market Still Has More Questions than Answers

October 3, 2014

Recent news from China has left the market cautiously bearish, mindful of the fact that there is still a lot of harvest time weather to negotiate.

International

ICAC – Lower World Cotton Prices to Persist in 2014/15

October 3, 2014

Noting the predicted 1.8 million tons of surplus cotton production and changes in China's cotton policy, a recent report from International Cotton Advisory Committee says prices are unlikely to rise to the levels of the last two seasons.

International

New Global Cotton Futures Contract Coming Early 2015

October 2, 2014

After a few regulatory delays, IntercontinentalExchange plans to launch its postponed global cotton futures contract early next year.

Around The Gin

Product News

PhytoGen Partners with Farmers to Aid Local Charities

October 17, 2014

Since becoming a partner in the Swisher Sweets/Sunbelt Expo Southeastern Farmer of the Year program three years ago, PhytoGen has made donations to 25 charities on behalf of state farmers of the year.

Product News

Enlist Duo Herbicide Approved; Enlist Weed Control System Now Cleared for Use

October 16, 2014

The Enlist Weed Control System from Dow AgroSciences has been approved for field use in corn and soybeans in 2015 by federal regulatory authorities, with introduction in cotton still scheduled for 2016.

News

Registration for 2015 Beltwide Cotton Conferences Opens as Program Takes Shape

October 3, 2014

Registration now is open for the 2015 Beltwide Cotton Conferences, set for January 5-7 at the Marriott Rivercenter in San Antonio, TX.

Product News

October 10 Deadline for Public Comments on Roundup Ready Xtend Crop System Plants

September 25, 2014

The public comment period on the draft environmental impact statement for cotton and soybean plants for Monsanto’s Roundup Ready Xtend Crop System will remain open through October 10.

Cotton Production

New Cotton Webcasts Focus on Using Yield Monitor Data for Precision Planning

September 10, 2014

Two new webcasts to help growers successfully capture and use data from yield monitors have been added to the Focus on Cotton online webcast resource, developed by Cotton Incorporated and the Plant Management Network.

Marketing

First Class Selected for Cotton Research and Promotion Program Hall of Fame

September 8, 2014

Five honorees have been elected to the first class of Cotton Incorporated’s newly-established Cotton Research and Promotion Program Hall of Fame.

Crop Inputs

FMC to Acquire Cheminova

September 8, 2014

Auriga Industries has agreed to sell its wholly-owned subsidiary Cheminova to FMC Corporation.

Crop Inputs

Bayer CropScience Opens New Cotton Research Greenhouse in Memphis

September 4, 2014

Bayer CropScience has opened its newest cotton research facility – a $17 million, 76,000-square foot state-of-the-art greenhouse and headhouse addition to its existing site at Agricenter International in Memphis, TN.

Latest News

Market Analysis

Sleepy Market Hiding Potential Volatility

October 20, 2014

Cotton trading remains locked in a rather wide ten cent trading channel, but actively trading only a four cent band around 63 cents – 61 to 65 cents, that is. In other words, maybe we are being lulled to sleep.

Market Analysis

Plexus: Market on Firm Footing Through Harvest

October 17, 2014

December prices should remain on firm footing until the bulk of the U.S. crop has been harvested and the quality is known. But the massive global inventory probably means a sideways-to-lower market going forward.

Market Analysis

Demand for Quality Cotton Keeps Market Positive

October 11, 2014

The market spent most of the week in positive territory, as its ability to close higher continues to voice the immediate need for quality cotton.

Market Analysis

Shurley on Cotton: Fragile Market Shows Improvement, Outlook Still Cautious

October 11, 2014

After recently falling to the 61-cent level, prices have made a modest, but still welcomed, recovery.

Marketing

U.S. Loan Program Could Take Price Pressure Off of Cotton Farmers

October 7, 2014

With cotton prices sitting below the threshold that triggers government loan repayment assistance, the pressure for growers to move their cotton to market after harvest may be reduced.

Market Analysis

Chinese Government Now a Marketplace Fundamental

October 6, 2014

The more things change, the more they stay the same. But through their recent actions, the primary fundamental in the marketplace has now become the Chinese government.

International

Plexus: Market Still Has More Questions than Answers

October 3, 2014

Recent news from China has left the market cautiously bearish, mindful of the fact that there is still a lot of harvest time weather to negotiate.

International

ICAC – Lower World Cotton Prices to Persist in 2014/15

October 3, 2014

Noting the predicted 1.8 million tons of surplus cotton production and changes in China's cotton policy, a recent report from International Cotton Advisory Committee says prices are unlikely to rise to the levels of the last two seasons.

International

New Global Cotton Futures Contract Coming Early 2015

October 2, 2014

After a few regulatory delays, IntercontinentalExchange plans to launch its postponed global cotton futures contract early next year.

Market Analysis

Confusion Reigns in Market Following China Cotton Policy Announcements

September 29, 2014

Weighed down by unexpected announcements from China, cotton prices continued to trend lower and confusion reigned, as traders attempted to decipher the actual Chinese cotton policy.

Market Analysis

Shurley on Cotton: Time for Growers to Consider Their Marketing Options

September 26, 2014

This is not a good time to be trying to sell cotton. Nothing will appear relatively attractive at this point, but growers nevertheless need to carefully consider their options.

Marketing

CCI Tour to Showcase U.S. Yarn and Fabrics to Uniform Manufacturers

September 23, 2014

Apparel manufacturers from eight countries will get a good look at U.S. cotton yarn and fabric production during Cotton Council International’s 2014 COTTON USA Western Hemisphere Uniform Manufacturers Tour.

Market Analysis

Segment Swap Program Educates Cotton Board Producers About Importer Decisions

September 22, 2014

The Cotton Board's producer members recently participated in a “Segment Swap” program designed to give them a better understand of how cotton importers make their sourcing decisions.

International

China Announces Cuts to Cotton Import Quotas

September 22, 2014

In a move that could add more pressure to global cotton prices, China has announced that it will cut 2015 cotton import quotas to the minimum 894,000 tons required under its commitments to the World Trade Organization.

Market Analysis

Little Market Movement As China’s Plans Begin to Emerge

September 19, 2014

The current trading range continues, as the market analyzes the impact of flooding in the U.S., continued dryness in Australia and the first initial official announcement by the Chinese government with respect to its new cotton policy.