U.S. and World Cotton Economic Outlook

March 2010

Prepared by:Economic Services

National Cotton Council

U.S. and World Cotton Economic Outlook

March 2010

Prepared by:Economic Services

National Cotton Council

Macroeconomic Environment

Percent

-4

-2

0

2

4

6

8

10

12

14

16W

orld US

Indi

a

Chi

na

2008 2009 2010 2011

Real GDP Growthin Selected Countries

U.S. Cotton Supply

30

40

50

60

70

80

90

100

110

Au

g

Se

p

No

v

Ja

n

Ma

r

Ma

y

Ju

l

Se

p

No

v

Dec 09 Dec-10

December Cotton FuturesCents per Pound

275

325

375

425

475

525

575

625

675

725

775

825

Au

g

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Dec 09 Dec-10

December Corn FuturesCents per Bushel

580

680

780

880

980

1080

1180

1280

1380

1480

1580

1680

Au

g

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Nov 09 Nov-10

November Soybean FuturesCents per Bushel

SoutheastSoutheast 1,891 1,891 2,123 2,123 12.212.2Mid-SouthMid-South 1,627 1,627 1,764 1,764 8.4 8.4 SouthwestSouthwest 5,243 5,243 5,718 5,718 9.1 9.1 WestWest 247 247 312 312 26.6 26.6

ALL UPLANDALL UPLAND 9,0089,008 9,9169,916 10.110.1

ALL ELSALL ELS 142 142 176 176 24.4 24.4

ALL COTTONALL COTTON 9,149 9,149 10,093 10,093 10.310.3

SoutheastSoutheast 1,891 1,891 2,123 2,123 12.212.2Mid-SouthMid-South 1,627 1,627 1,764 1,764 8.4 8.4 SouthwestSouthwest 5,243 5,243 5,718 5,718 9.1 9.1 WestWest 247 247 312 312 26.6 26.6

ALL UPLANDALL UPLAND 9,0089,008 9,9169,916 10.110.1

ALL ELSALL ELS 142 142 176 176 24.4 24.4

ALL COTTONALL COTTON 9,149 9,149 10,093 10,093 10.310.3

2010 U.S. Cotton Plantings

20092009 20102010 %% Actual Actual Estimated* Estimated* ChangeChange

20092009 20102010 %% Actual Actual Estimated* Estimated* ChangeChange

Thousand AcresThousand AcresThousand AcresThousand Acres

*2010 NCC Planting Intentions Survey *2010 NCC Planting Intentions Survey

SoutheastSoutheast 765 765 859 859 12.212.2Mid-SouthMid-South 658 658 714 714 8.4 8.4 SouthwestSouthwest 2,122 2,122 2,314 2,314 9.1 9.1 WestWest 100 100 126 126 26.6 26.6

ALL UPLANDALL UPLAND 3,6453,645 4,0134,013 10.110.1

ALL ELSALL ELS 57 57 71 71 24.4 24.4

ALL COTTONALL COTTON 3,703 3,703 4,085 4,085 10.310.3

SoutheastSoutheast 765 765 859 859 12.212.2Mid-SouthMid-South 658 658 714 714 8.4 8.4 SouthwestSouthwest 2,122 2,122 2,314 2,314 9.1 9.1 WestWest 100 100 126 126 26.6 26.6

ALL UPLANDALL UPLAND 3,6453,645 4,0134,013 10.110.1

ALL ELSALL ELS 57 57 71 71 24.4 24.4

ALL COTTONALL COTTON 3,703 3,703 4,085 4,085 10.310.3

2010 U.S. Cotton Plantings

20092009 20102010 %% Actual Actual Estimated* Estimated* ChangeChange

20092009 20102010 %% Actual Actual Estimated* Estimated* ChangeChange

Thousand HectaresThousand HectaresThousand HectaresThousand Hectares

*2010 NCC Planting Intentions Survey*2010 NCC Planting Intentions Survey

0

4

8

12

16

20

24

28

96 97 98 99 00 01 02 03 04 05 06 07 08 09e 10p

Mil

lio

n B

ales

0

1

2

3

4

5

6

Mil

lio

n M

etri

c T

on

s

U.S. Cotton Production

*e = USDA estimates, p = USDA 2010 Ag Outlook projections *e = USDA estimates, p = USDA 2010 Ag Outlook projections

0

5

10

15

20

25

30

35

96 97 98 99 00 01 02 03 04 05 06 07 08 09e 10p

Mil

lio

n B

ales

0

1

2

3

4

5

6

7

Mil

lio

n M

etri

c T

on

s

Beg Stocks Imports Production

U.S. Cotton Supply

*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE

U.S. Cotton Demand

Fiber Equivalents

0

10

20

30

40

50

60

98 99 00 01 02 03 04 05 06 07 08 09e 10f

Mill

ion

Ba

les

0

2

4

6

8

10

12

Mill

ion

Me

tric

To

ns

Cotton Other

Net Domestic Fiber Consumption

Percent

38

39

40

41

42

43

44

45

97 98 99 00 01 02 03 04 05 06 07 08 09

Cotton’s Share of Fiber Consumption

Fiber Equivalents

0

4

8

12

16

20

24

28

98 99 00 01 02 03 04 05 06 07 08 09e 10f

Mil

lio

n B

ales

0

1

2

3

4

5

6

Mil

lio

n M

etri

c T

on

s

Retail Imported

Components of Retail Cotton Consumption

Fiber Equivalents

0

5

10

15

20

25

98 99 00 01 02 03 04 05 06 07 08 09e 10f

Mil

lio

n B

ales

0

1

2

3

4

5

Mil

lio

n M

etri

c T

on

s

U.S. Cotton Textile Imports

U.S. Cotton Content in Textile ImportsFiber Equivalents

0

3

6

9

12

15

18

21

24

98 99 00 01 02 03 04 05 06 07 08 09e

Mil

lio

n B

ales

0

1

2

3

4

5

Mil

lio

n M

etri

c T

on

s

CBINAFTAROWNon-U.S. Cotton

U.S. Trade With Mexico

0

1

2

3

4

00 01 02 03 04 05 06 07 08 09e

Mil

lio

n B

ales

0

0.2

0.4

0.6

0.8

Mil

lio

n M

etri

c T

on

s

Imports Exports

U.S. Trade with CBI

0

1

2

3

4

00 01 02 03 04 05 06 07 08 09e

Mil

lio

n B

ales

0

0.2

0.4

0.6

0.8

Mil

lio

n M

etri

c T

on

s

Imports Exports

U.S. Imports from China

0

1

2

3

4

5

6

00 01 02 03 04 05 06 07 08 09e

Mil

lio

n B

ales

0

0.2

0.4

0.6

0.8

1

1.2

Mil

lio

n M

etri

c T

on

s

U.S. Cotton Mill Use(Calendar Year, Million Bales)

0

2

4

6

8

10

12

98 99 00 01 02 03 04 05 06 07 08 09e 10f

Mil

lio

n B

ales

0.0

0.4

0.8

1.2

1.6

2.0

2.4

Mil

lio

n M

etri

c T

on

s

U.S. Cotton Mill Use(Crop Year, Million Bales)

0

2

4

6

8

10

12

98 99 00 01 02 03 04 05 06 07 08 09e 10p

Mil

lio

n B

ales

0

0.4

0.8

1.2

1.6

2

2.4

Mil

lio

n M

etri

c T

on

s

*e = USDA estimates, p = USDA 2010 Ag Outlook projections *e = USDA estimates, p = USDA 2010 Ag Outlook projections

0

5

10

15

20

25

30

98 99 00 01 02 03 04 05 06 07 08 09e 10p

Mil

lio

n B

ales

0

1

2

3

4

5

6

Mil

lio

n M

etri

c T

on

s

Exports Mill Use Production

U.S. Cotton Production & Use

*e = USDA estimates, p = USDA 2010 Ag Outlook projections *e = USDA estimates, p = USDA 2010 Ag Outlook projections

The World Market & U.S. Cotton Exports

-10

0

10

20

30

40

50

60

70

97 98 99 00 01 02 03 04 05 06 07 08 09e

Mil

lio

n B

ales

-2.2

-0.2

1.8

3.8

5.8

7.8

9.8

11.8

13.8

Mil

lio

n M

etri

c T

on

s

Net Imports Production Use Stocks

China Cotton Supply & Use

World Cotton Production

0

25

50

75

100

125

98 99 00 01 02 03 04 05 06 07 08 09e 10p

Mil

lio

n B

ales

0

5

10

15

20

25

Mil

lio

n M

etri

c T

on

s

*e = USDA estimates, p = USDA 2010 Ag Outlook projections*e = USDA estimates, p = USDA 2010 Ag Outlook projections

0

20

40

60

80

100

120

140

160

98 99 00 01 02 03 04 05 06 07 08 09e 10f

Mil

lio

n B

ales

0

5

10

15

20

25

30

Mil

lio

n M

etri

c T

on

s

Cotton Polyester

World Fiber Mill Use

*PCI

Cents per Pound

30

40

50

60

70

80

90

Jan

-04

Ap

r-04

Au

g-0

4

No

v-04

Mar

-05

Jun

-05

Sep

-05

Jan

-06

Ap

r-06

Au

g-0

6

No

v-06

Mar

-07

Jun

-07

Oct

-07

Jan

-08

May

-08

Au

g-0

8

No

v-08

Mar

-09

Jun

-09

Oct

-09

Jan

-10

"A" FE Index

Asian Polyester Staple

Fiber Prices

World Cotton Mill Use

0

20

40

60

80

100

120

140

98 99 00 01 02 03 04 05 06 07 08 09e 10p

Mil

lio

n B

ales

0

5

10

15

20

25

30

Mil

lio

n M

etri

c T

on

s

*e = USDA estimates, p = USDA 2010 Ag Outlook projections *e = USDA estimates, p = USDA 2010 Ag Outlook projections

40

50

60

70

80

90

100

110

120

130

99 00 01 02 03 04 05 06 07 08 09e

Mill

ion

Ba

les

9

12

15

18

21

24

27

Mill

ion

Me

tric

To

ns

Stocks Production Use

Foreign Cotton Production & Use

U.S. Cotton Exports

0

2

46

8

10

12

1416

18

20

98 99 00 01 02 03 04 05 06 07 08 09e 10p

Mil

lio

n B

ales

0

1

2

3

4

Mil

lio

n M

etri

c T

on

s

*e = USDA estimates, p = USDA 2010 Ag Outlook projections *e = USDA estimates, p = USDA 2010 Ag Outlook projections

World Cotton Ending Stocks

0

10

20

30

40

50

60

70

97 98 99 00 01 02 03 04 05 06 07 08 09e

Mil

lio

n B

ales

0

2

4

6

8

10

12

14

Mil

lio

n M

etri

c T

on

s

U.S. ROW China

39 4144

3644

52

43

58

49

61595660

0

10

20

30

40

50

60

70

80

97 98 99 00 01 02 03 04 05 06 07 08 09

Percent

Cotton Stocks/Use (World less China)

U.S. Supply and DemandMillion Bales

Beginning Stocks 6.34 3.20Production 12.40 16.00Imports 0.01 0.00

Total Supply 18.74 19.20

Mill Use 3.50 3.40Exports 12.00 12.60

Total Offtake 15.50 16.00

Ending Stocks 3.20 3.20Stocks-to-Use Ratio 20.6% 20.0%

2009/10e* 2010/11p*

*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE

U.S. Supply and DemandMillion Metric Tons

Beginning Stocks 1.38 0.70Production 2.70 3.49Imports 0.00 0.00

Total Supply 4.08 4.18

Mill Use 0.76 0.74Exports 2.61 2.75

Total Offtake 3.38 3.49

Ending Stocks 0.70 0.70Stocks-to-Use Ratio 20.6% 20.0%

2009/10e* 2010/11p*

*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE

Beginning Stocks 62.42 51.41Production 102.24 113.50Imports 34.39 37.00

Mill Use 115.70 118.50Exports 34.40 37.00

Ending Stocks 51.41 48.91Stocks-to-Use Ratio 44.4% 41.3%

Beginning Stocks 62.42 51.41Production 102.24 113.50Imports 34.39 37.00

Mill Use 115.70 118.50Exports 34.40 37.00

Ending Stocks 51.41 48.91Stocks-to-Use Ratio 44.4% 41.3%

World Supply and DemandMillion Bales

2009/10e* 2010/11p*

*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE

Beginning Stocks 13.60 11.20Production 22.27 24.73Imports 7.49 8.06

Mill Use 25.21 25.82Exports 7.49 8.06

Ending Stocks 11.20 10.66Stocks-to-Use Ratio 44.4% 41.3%

Beginning Stocks 13.60 11.20Production 22.27 24.73Imports 7.49 8.06

Mill Use 25.21 25.82Exports 7.49 8.06

Ending Stocks 11.20 10.66Stocks-to-Use Ratio 44.4% 41.3%

World Supply and DemandMillion Metric Tons

2009/10e* 2010/11p*

*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE*e = USDA estimates, p = USDA 2010 Ag Outlook projections with stocks adjusted to reflect March WASDE

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