U.S. Cotton Exports Rise on Growing Demand

By Jim.Robinson|February 11, 2010

The 2009-10 U.S. cotton supply and demand estimates show sharply higher exports, lower ending stocks, and higher prices relative to last month. Production and domestic mill use are unchanged.

The export forecast is raised 1.0 million bales to 12.0 million, as new export sales of more than 1.8 million bales were made in January. Led by a drop in the New York futures market, recent lower prices for U.S. cotton combined with strong foreign mill demand have boosted export prospects.

Accordingly, U.S. ending stocks are now forecast at 3.3 million bales, 21.4 percent of total use. If realized, this would be the lowest stocks-to-use ratio since 2003-04. The forecast range of 59 to 65 cents per pound for the marketing-year average price received by producers is raised 2 cents on the lower end and 1 cent on the upper end, based on a higher-than-expected average price received for the month of December.

This month’s world cotton 2009-10 forecasts show higher beginning stocks, largely offset by higher consumption. Beginning stocks are raised in China due to modest reductions in estimated consumption for marketing years 2007-08 and 2008-09.

World production is virtually unchanged. Higher forecast 2009-10 world consumption includes increases for China and India, based on a stronger estimated recovery in demand than previously anticipated. Total world trade is about unchanged, as higher U.S. exports are mainly offset by a reduction in exports by India. World ending stocks are raised marginally from last month.