COTTON AND WOOL YEARBOOK -- SUMMARY November 22, 1999 November 1999, CWS-1099 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete text of COTTON AND WOOL Yearbook will be available within 3-4 weeks following this summary release. --------------------------------------------------------------------------- Large 1999 Plantings Lead to Sharply Higher U.S. Cotton Crop U.S. cotton production in 1999 is forecast at 16.53 million bales, 19 percent above last season's 13.92 million. This season's output is based on a much larger area but a lower national yield. U.S. cotton acreage jumped 1.2 million acres from 1998 to 14.6 million, the third largest area in the past 35 years. After approaching 20 percent in 1998, abandonment returned to a more "normal" level this season, and harvested cotton area is estimated at 13.4 million acres, nearly 3 million above 1998. The national average yield is forecast to decline 33 pounds from last season to 592 pounds per harvested acre, the lowest since 1995. U.S. cotton exports in 1999/2000 (August/July marketing year) are expected to rebound from last season's 13-year low. Shipments are projected to reach 5.7 million bales this season as an improving world economy in the aftermath of the Asian crisis and more competitive prices resulting from the reinstatement of the "Step 2" program are coupled with the larger exportable supply. In early November, U.S. export commitments had already reached 4.2 million bales, nearly 1 million above a year earlier. Even with world cotton trade rising this season, U.S. exports are climbing faster. The U.S. share of the global market is projected to climb to 22 percent in 1999/2000, compared with 18.5 percent last season. In contrast, U.S. cotton mill use is expected to fall slightly (2 percent) this season to 10.2 million bales. The continued rise in cotton textile imports, a projected slowdown in the robust U.S. economic growth of the last several years, and a decline in denim demand are expected to moderate mill consumption. In 1999, cotton textile exports are expected to increase for the 15th consecutive year, reaching the equivalent of 4.3 million bales. On the other hand, cotton textile imports will rise for the 11th year in a row, and could approach the equivalent of 13.5 million bales, further widening the textile trade deficit. In addition, total domestic consumption (mill use plus net textile trade) could reach a record 9.5 billion pounds, with per capita consumption surpassing last year's 34.4 pounds. Similar to 1998/99, U.S. cotton beginning stocks were 3.9 million bales. However, the larger production this season has mitigated the need for foreign supplies and imports are expected to be small in 1999/2000. As a result, total U.S. cotton supply is projected at 20.5 million bales, more than 2 million above 1998/99. Meanwhile, demand is forecast at 15.9 million bales, 8 percent above last season. Based on these supply and demand estimates, U.S. ending stocks for 1999/2000 are estimated to rise to 4.6 million bales, 17 percent above last season and similar to the 1992 season. With both stocks and use projected to rise in 1999/2000, the stocks-to-use ratio is expected to increase only 2 percentage points to 29 percent. World cotton production in 1999/2000 is forecast to rise to 87.3 million bales, up 2.8 million, primarily due to the larger U.S. crop. Foreign production, projected at 70.8 million bales, is only marginally higher. Production increases in 1999/2000 for Pakistan and Uzbekistan stem from higher area and yield, but are offset by lower production in China and Mexico, where planted area declined. Likewise, world cotton consumption is projected to rebound after two consecutive declines to 87.8 million bales in 1999/2000, a gain of 2.8 million bales. Although lower use is expected in the United States, consumption in China and India--the world's two largest consumers--is forecast to rise a combined 1.2 million bales and account for over 40 percent of the rise in consumption. Brazil, Turkey, Mexico, and Pakistan are also projected to consume more cotton this season as world economic growth rebounds. World cotton exports in 1999/2000 are forecast to increase 9 percent to 25.7 million bales. Foreign shipments are expected to reach 20 million bales, above the last two seasons and equal to 1996/97. Rising exports from Uzbekistan--the leading foreign exporter--coupled with China's return as a major shipper in 1999/2000 account for nearly all of the projected 800,000-bale increase in foreign exports this season. In addition, China's 1.2-million-bale export estimate is the highest in over a decade. With the increase in world cotton consumption, stocks are projected to decline 600,000 bales to 41.3 million. Despite the expected increase in U.S. stocks, foreign stocks in 1999/2000 are forecast to fall nearly 1.3 million bales to 36.7 million, the lowest in 3 years. However, the foreign decline is attributable to China, where stocks are forecast to fall nearly 2.5 million bales this season. Excluding China, foreign stocks are expected to increase 1.2 million bales to 21.8 million, equaling those of 1991/92. At season's end, China is forecast to hold 36 percent of the world's cotton stocks, down from 41 percent in 1998/99. U.S. raw wool production in 1999 is estimated at 25 million pounds, clean, significantly below the early 1990's and the lowest on record. Despite lower production, U.S. wool imports are also projected to fall in 1999 as consumption continues its recent descent. Imports of raw wool are projected at only 40 million pounds, significantly below 1998. Likewise, U.S. raw wool mill demand is expected to reach about 85 million pounds in 1999, 25 percent below a year ago. As a result, 1999 carryover supplies are forecast higher at 48 million pounds, the largest in 4 years. This issue of the Cotton and Wool Yearbook contains two special articles: "Analyzing U.S. Cotton Acreage Response Under the 1996 Farm Act," and "An Economic Analysis of U.S. Total Fiber Demand and Cotton Mill Demand." Printed copies of the Cotton and Wool Yearbook will be available in about 3 weeks. For more information, contact Leslie Meyer (202) 694-5307. Text of the full report will also be available on the ERS web site at www.ag.econ.gov. END_OF_FILE