COTTON AND WOOL YEARBOOK--SUMMARY November 22, 2002 November 2002, ERS-CWS-2002 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 The complete report will be available electronically about 1 week following this summary release. --------------------------------------------------------------------------- 2002 Cotton and Wool Situation and Outlook Yearbook Record World Cotton Consumption, Reduced Production Projected in 2002/03 World cotton consumption in 2002/03 (August/July marketing year) is forecast at a record 96.2 million bales, more than 2 million bales above a year earlier, as global demand for textiles and apparel continues its rebound from the stagnant growth seen in the 1990s. Foreign mill use this season is expected to rise to its fourth consecutive record-high while U.S. mill use remains flat. The largest gains are expected in China, India, Pakistan, and Turkey. In contrast with rising consumption, world cotton production in 2002/03 is forecast at 88.1 million bales, more than 10 million bales below last season. Production is estimated lower in most major producing countries this season, with by far the largest decreases expected in China (2.9 million bales lower), the United States (2.5 million), India (1.4 million), and Australia (1.2 million). Foreign cotton production in 2002/03 is forecast to be its lowest in 8 years at 70.3 million bales, with only a few countries, including the major South American producers, Turkey, and Zimbabwe, expected to harvest larger crops than the year before. World cotton exports are expected to increase nearly 2 percent in 2002/03 to 29.4 million bales, the highest since 1990/91. Although foreign exports are projected to rise nearly 4 percent from 2001/02 to 18.7 million bales, they will remain the second lowest in nearly 2 decades. While many foreign countries’ exports are likely to expand this season, exports from Australia and Syria are expected to decrease as crop problems there have led to lower supplies. With rising world consumption and declining production in 2002/03, cotton stocks are projected to fall this season to 40 million bales, 7.5 million below last season and the lowest in 7 years. Although the bulk of the decrease is attributable to China, where stocks are expected to drop 4 million bales this season, significant declines are seen elsewhere including Australia, India, the United States, and Pakistan. U.S. cotton production in 2002/03 is forecast at 17.8 million bales, 2.5 million bales or 12 percent below last season's record crop. This season's cotton output is based on smaller area and a lower, more normal national yield. U.S. cotton planted area declined nearly 1.4 million acres from 2001 to 14.4 million this season, the lowest in 4 years. Generally favorable conditions throughout much of the growing season permitted better-than-average U.S. cotton crop development and conditions. However, inclement harvest weather, particularly in the eastern half of the Cotton Belt, delayed progress significantly this fall. Nevertheless, abandonment is estimated at about 11 percent this year, slightly below 2001/02. Harvested cotton area is estimated at 12.9 million acres, nearly 1 million below last season and the second lowest in the past 9 years. The national yield is projected at 665 pounds per harvested acre, well below last season’s near record. U.S. cotton exports in 2002/03 are projected to remain at a relatively high 10.8 million bales, albeit slightly lower than last season’s 75-year high. Large U.S. supplies of exportable cotton remain this season despite total supplies being 1 million bales below 2001/02. In addition, projections of smaller foreign production and increased consumption are expected to benefit U.S. exports and push world trade higher. With prospects for world cotton exports rising modestly in 2002/03, the U.S. share of global trade is expected to approach 37 percent, slightly below last season but well above the 10-year average. In contrast, U.S. cotton mill consumption is forecast at only 7.7 million bales in 2002/03, similar to the previous season but well below the recent high of 11.3 million bales in 1997/98. The continued growth of U.S. cotton textile and apparel imports over the last 5 years has forced major restructuring, including reduced capacity, in the U.S. manufacturing industry. To remain competitive, U.S. textile and apparel processors have focused on core products and niche markets. U.S. cotton stocks at the beginning of 2002/03 were estimated at 7.4 million bales. With a reduced crop forecast this season, total U.S. cotton supply in 2002/03 is projected at 25.3 million bales, or 4 percent below a year ago. Meanwhile, U.S. cotton demand is forecast to exceed production for the first time in 4 years with total demand projected at 18.5 million bales, slightly below 2001/02. As a result, based on these supply and demand estimates, U.S. ending stocks for 2002/03 are estimated to decline for the first time since 1999/2000 to 6.8 million bales. Consequently, the U.S. stocks-to-use ratio is expected to decrease slightly to about 37 percent in 2002/03. END_OF_FILE