COTTON AND WOOL OUTLOOK June 12, 1995 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- COTTON AND WOOL OUTLOOK is published monthly (except January) by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. CWS--0695. ----------------------------------------------------------------------------- Average Start for Cotton Crop The U.S. cotton crop is off to an average start this year. Nationally, cotton plantings were 85 percent complete for the week ending June 4. This compares with 90 percent last year and a 5-year average of 87 percent. Most States were complete or nearly complete with the usual exceptions of Oklahoma and Texas. Cotton plantings in Texas were 68 percent complete, compared with the 5-year average of 77 percent. Oklahoma was further behind, however, at 36 percent planted versus an average of 69 percent. Cotton conditions also lag a year ago. In early June, only 58 percent of this year's crop is in "good" or "excellent" condition. This compares with 69 percent in 1994. The difference from last year is most notable in the "fair" category, where 37 percent of the crop is reported versus 27 percent in 1994. Although less than an ideal start, the 1995 crop, in most parts of the United States, has adequate time to make up ground lost to early-season weather problems. The current USDA cotton production projection for 1995 remains at 21 million bales. In addition, domestic mill use is projected at 11.6 million bales, while exports are expected to reach 8.5 million. With total demand in 1995/96 projected to exceed 20 million bales, ending stocks could increase about a million bales from this year's estimated ending level of 1.7 million. Mill Use Slows The extraordinary pace of cotton mill consumption experienced this season slowed in April according to the latest U.S. Commerce Department data. Based on a calendar month, preliminary April cotton mill use eased to 876,000 bales, the lowest since December 1994. On a daily basis, April mill use equaled 43,800 bales per day, down from March's average of 45,500 bales. Compared with a year ago, however, April 1995's daily average was 1,900 bales higher. Cotton mill consumption during the first 9 months of 1994/95 totaled nearly 8.54 million bales, compared with 7.71 million last season. On a seasonally adjusted annual rate (SAAR) basis, April's consumption declined to 11.25 million bales. However, the SAAR average for August through April is near the current USDA mill use estimate of 11.4 million bales. In addition, cotton's share of fiber use on the cotton system equaled 76.8 percent in April, up slightly from March. For the season, cotton's share has averaged just above 77 percent. If this seasonal average holds, it will be the highest in nearly 30 years. Manmade fiber consumption declined in April to 127 million pounds, compared with 153 million a month earlier. April's consumption was also 5 percent below a year ago. The seasonally adjusted daily rate dropped to 6.2 million bales, the lowest since September 1994. Most of the decline resulted from lower noncellulosic consumption. However, manmade fiber mill use for August through April totaled 1.2 billion pounds, 4 percent above last season. Domestic mill consumption of wool also declined in early 1995, compared with a year earlier. Mill use during the first-quarter of 1995 totaled 38.3 million pounds, nearly 6 percent below last year. However, domestic mill use is expected to remain relatively strong and total 150 million pounds, near last year's consumption. U.S. textile mills are depending more on raw wool imports this season to offset lower production, due in part to the phasing out of the wool support program. Textile Imports and Exports Rise Textile imports in March jumped 46.5 million pounds (8 percent) from February to 652 million (raw fiber equivalent). Imports of all fibers except silk increased from a month earlier. Cotton textile imports rose over 21 million pounds (7 percent) with increases in all major end-use categories. Manmade imports rose nearly 18 million pounds, with the March increase largely attributed to apparel products. March textile exports rose to 273 million pounds, nearly 18 percent above February. Overall, textile exports rose in all major fibers and most major end-use categories. Yarn, thread, and fabric exports accounted for 48 percent of total March exports. Manmade textile shipments represented 49 percent of the total and cotton, 44 percent. Cotton textile exports, at 120 million pounds, increased for the third consecutive month in 1995 and were nearly 30 percent above year-ago shipments. The overall March textile trade deficit was 379 million pounds, with cotton accounting for 57 percent of the total (218 million pounds). The deficit increased 10 percent from a year ago when it totaled 345 million pounds. The cotton trade deficit also increased slightly from a month earlier and was 4 percent above March 1994. Foreign Cotton Production and Consumption There were no changes this month in the projections for 1995/96 foreign production, consumption, and trade. Estimated 1994/95 foreign production was raised 1.2 million bales, while consumption and exports were virtually unchanged. In 1995/96, foreign cotton production is expected to reach 68 million bales, 3 million higher than 1994/95. A smaller increase--1.7 million bales--is projected for foreign consumption, to 75.2 million. While world trade is expected to fall slightly, foreign ending stocks are expected to grow in 1995/96, from 26.9 million bales to 28.4 million. June's changes in the 1994/95 estimates were dominated by revised production in China and India. China's State Statistical Bureau (SSB) published a revised production number in their 1995 Statistical Survey of China. USDA's last estimate of 19.5 million bales was revised to match the SSB's estimate of 19.9 million, 16 percent above the 1993/94 crop. India's 1994/95 crop was revised upward 600,000 bales as farmers apparently released previously hoarded cotton. Arrivals had been below year-earlier levels, but they recently shot upward, and now stand above 1993/94. The 1994/95 crop is now estimated at 10.2 million bales, compared with 9.6 million a year earlier. Estimates for 1994/95 production were also raised for Australia (125,000 bales) and Pakistan (100,000), but reduced for Cote d'Ivoire (35,000) and Israel (28,000). Consumption overseas in 1994/95 remains virtually unchanged this month as a slight increase for Russia nearly offsets a small decline for China. In each case, textile production trends suggested the change. Russia's textile production apparently reached its nadir during the fall of 1994, and while a large decline compared with 1993/94 still seems likely, the severity of the decline has lessened. China's textile production has also picked up, according to recent yarn production data, but not as much as previously anticipated. China's 1994/95 cotton consumption was lowered 300,000 bales to 19.7 million. This would be a 1.5-million-bale decline from the year before, and the largest decline since 1961/62. Foreign ending stocks in 1994/95 are now estimated to reach 26.9 million bales, compared with 25.3 million a month ago. Excluding China, estimated foreign ending stocks rose less, from 16.4 million bales to 17 million. Cotton Prices Mixed U.S. cotton prices were mixed in May as the average price received by upland producers declined to its lowest level since December 1994. Through mid-May, the reported price was 78.4 cents per pound, down from a revised April figure of 84.5 cents. Last May, the price equaled 69 cents. Spot prices, on the other hand, continued to move higher. The upland spot price for base quality cotton averaged above $1.05 per pound in May, while the ELS spot price averaged about $1.28. With cotton prices well above a year ago, upland producers have forward contracted a good portion of their 1995 acreage. As of June 1, 36 percent of the acreage had been contracted, compared with 23 percent in 1994. In addition, this percentage is the highest since 1976. By region, the Southeast and West had booked 47 percent of their acreage; the Delta, 39 percent; and the Southwest, 26 percent. Mill-delivered upland prices were up slightly in May, averaging $1.14 per pound, 28.5 cents above last year. Meanwhile, polyester and rayon staple prices have remained flat at 86 cents and $1.04 per pound, respectively. Polyester prices are 11 cents higher than May 1994. The tight stock situation, along with higher prices, have forced mills to slow their fiber usage. For cotton, this will likely continue until the cotton harvest gets into full swing this fall. The adjusted world price (AWP) continued to move lower in early June. For the week of June 9-15, the AWP equaled 75.67 cents per pound, compared with 76.33 cents a week earlier and 71.00 cents a year ago. Meanwhile, "new crop" A Index prices continued to average around 90 cents per pound. For the week ending June 8, the average equaled 90.25 cents, with 6 of the 14 styles quoted. Both U.S. quotes remain in the A Index, with Greece becoming the cheapest offering during the aforementioned week. In addition, "old crop" A Index prices have not been available since May 24, as only three quotes have been reported. On May 25, the eighth special import (Step 3) quota was triggered. Under this quota, which opened on May 31, upland cotton must be purchased by August 28 and imported into the United States by November 26. This quota permits the importation of 104,758,692 pounds (218,247 bales) of cotton. Since the first special import quota was opened on April 12, only about 900 bales (480-pounds) of cotton have been imported through June 4 under these special quotas. The next issue of the Cotton and Wool Outlook will be released on July 12, 1995. For further information, contact Leslie Meyer at (202) 501-8528, Robert Skinner at (202) 219-0836, John Lawler at (202) 501-8525, or Steve MacDonald at (202) 219-1179. U.S. COTTON SUPPLY AND USE ESTIMATES ---------------------------------------------------------------------- 1994/95 1995/96 ---------------------------- Item Apr May June June ---------------------------------------------------------------------- Upland: Million acres Planted 13.56 13.55 13.55 16.01 Program 11.11 11.62 11.62 13.02 Harvested 13.16 13.16 13.16 14.97 Pounds Yield/harvested acre 705 705 705 661 Million 480-lb. bales Beginning stocks 3.30 3.30 3.30 1.63 Production 19.33 19.32 19.32 20.61 Total supply 1/ 22.65 22.64 22.65 22.26 Mill use 11.22 11.32 11.32 11.52 Exports 9.61 9.80 9.80 8.18 Total use 20.83 21.12 21.12 19.70 Ending stocks 1.92 1.63 1.63 2.65 Percent Stocks-to-use ratio 9.2 7.7 7.7 13.4 Extra-long staple: 1,000 acres Planted 169 169 169 188 Program 84 84 84 54 Harvested 166 166 166 186 Pounds Yield/harvested acre 975 974 974 1,000 1,000 480-lb. bales Beginning stocks 227 227 227 75 Production 338 338 338 388 Total supply 1/ 565 567 570 468 Mill use 85 85 85 85 Exports 390 400 400 320 Total use 475 485 485 405 Ending stocks 80 72 75 53 Percent Stocks-to-use ratio 16.8 14.8 15.5 13.1 ---------------------------------------------------------------------- Based on USDA estimates. 1/ Includes imports. WORLD COTTON SUPPLY AND USE ESTIMATES ---------------------------------------------------------------------- 1994/95 1995/96 ---------------------------- Item Apr May June June ---------------------------------------------------------------------- Supply: Million 480-lb. bales Beginning stocks World 29.62 27.42 27.54 28.61 Foreign 26.09 23.89 24.01 26.91 Production World 83.80 83.54 84.71 89.00 Foreign 64.13 63.87 65.05 68.00 Imports World 29.68 30.11 30.28 27.70 Foreign 29.67 30.09 30.26 27.67 Use: Mill use World 84.98 84.99 84.91 86.80 Foreign 73.68 73.59 73.51 75.20 Exports World 28.69 28.90 28.83 27.20 Foreign 18.69 18.70 18.63 18.70 Ending stocks World 29.27 27.01 28.61 31.10 Foreign 27.27 25.31 26.91 28.40 Stocks-to-use ratio Percent World 34.4 31.8 33.7 35.8 Foreign 37.0 34.4 36.6 37.8 ---------------------------------------------------------------------- Based on USDA estimates. FIBER SUPPLY ---------------------------------------------------------------------- 1995 1994 ------------------------- Item Feb Mar Apr Apr ---------------------------------------------------------------------- Cotton: 1,000 480-lb. bales Ginnings 110 0 0 0 Imports since August 1 9.1 11.2 NA 3.5 Stocks, beginning 13,250 11,066 8,629 10,120 At mills 663 691 736 710 Public storage 10,508 8,322 6,258 8,352 CCC stocks 3,111 2,090 1,318 1,475 Manmade: Million pounds Production 813.4 879.5 814.4 831.8 Noncellulosic 763.0 835.4 774.1 788.6 Cellulosic 50.4 44.1 40.3 43.2 Total since January 1 1,606.5 2,476.3 3,319.4 3,079.0 1995 1994 ------------------------ Jan Feb Mar Mar ---------------------------------------------------------------------- Million pounds Raw fiber imports 91.8 89.8 103.3 73.7 Noncellulosic 85.4 84.2 96.7 64.1 Cellulosic 6.4 5.6 6.6 9.6 Total since January 1 84.9 174.7 287.3 223.9 Wool and Mohair: 1,000 pounds Raw wool imports, clean 10,441 7,722 10,772 7,683 48's-and-finer 8,903 6,431 7,929 5,112 Not-finer-than-46's 1,538 1,291 2,843 2,296 Total since January 1 10,441 18,164 28,935 25,134 Wool top imports 360 590 605 140 Total since January 1 360 950 1,556 974 Mohair imports, clean 4 0 7 1 Total since January 1 4 4 11 1 ---------------------------------------------------------------------- NA = Not available. COTTON SYSTEM FIBER CONSUMPTION ---------------------------------------------------------------------- 1995 1994 --------------------------- Item Feb Mar Apr Apr ---------------------------------------------------------------------- Cotton: 1,000 480-lb. bales All consumed by mills 1/ 912 1,048 876 880 Total since August 1 1/ 6,613 7,661 8,537 7,708 SA annual rate 2/ 11,523 11,606 11,250 10,726 SA daily rate 2/ 44.3 44.6 43.3 41.3 Daily rate 45.6 45.5 43.8 41.9 Upland consumed by mills 1/ 902 1,037 867 872 Total since August 1 1/ 6,559 7,596 8,463 7,657 SA annual rate 2/ 11,397 11,483 11,133 10,637 SA daily rate 2/ 43.8 44.2 42.8 40.9 Daily rate 45.1 45.1 43.4 41.5 Spindles in place 7,274 7,252 7,229 7,838 Active spindles 6,850 6,801 6,748 7,248 100 percent cotton 2,972 2,974 2,956 3,080 100 percent manmade 1,118 1,131 1,110 1,252 Blends 2,760 2,696 2,682 2,916 Cotton's share of fibers 76.9 76.7 76.8 75.8 Manmade: 1,000 pounds Total consumed by mills 1/ 131,299 152,770 127,232 134,476 Total since August 1 1/ 939,637 1,092,407 1,219,639 1,173,751 Daily rate 6,565 6,642 6,362 6,404 Noncellulosic staple 5,690 5,791 5,474 5,487 Cellulosic staple 875 851 888 917 ---------------------------------------------------------------------- 1/ Adjusted to calendar month. 2/ SA = seasonally adjusted. FIBER EXPORTS ---------------------------------------------------------------------- 1995 1994 ------------------------ Item Jan Feb Mar Mar ---------------------------------------------------------------------- Cotton: 1,000 480-lb. bales Upland exports 1,068 1,332 1,310 686 Total since August 1 4,006 5,338 6,646 3,643 Sales for next season 8 193 217 16 Total since August 1 2,695 2,888 3,104 180 ELS exports 47.0 51.3 81.9 57.4 Total since August 1 122.4 173.8 255.7 207.7 Sales for next season 20.1 24.5 75.4 2.1 Total since August 1 34.1 58.6 133.9 6.1 Manmade: Million pounds Raw fiber exports 79.9 72.1 95.3 75.1 Noncellulosic 74.2 66.9 87.8 72.8 Cellulosic 5.7 5.2 7.5 2.3 Total since January 1 89.2 161.3 247.4 201.2 Wool and Mohair: 1,000 pounds Raw wool exports, clean 190.8 351.9 423.7 161.1 Total since January 1 190.8 542.8 966.5 764.2 Wool top exports 636.5 1,182.1 888.9 654.7 Total since January 1 636.5 1,818.5 2,707.5 1,875.6 Mohair exports, clean 874.1 610.4 289.4 203.8 Total since January 1 874.1 1,484.5 1,773.8 1,729.1 ---------------------------------------------------------------------- FIBER PRICES ---------------------------------------------------------------------- 1995 1994 --------------------------- Item Mar Apr May May ---------------------------------------------------------------------- Domestic cotton prices: Cents per pound Adjusted World Price 95.83 94.53 87.04 71.57 Jul'95 futures 100.53 101.72 104.81 76.27 Dec'95 futures 77.43 78.51 81.01 NA Upland spot 41-34 104.20 104.94 105.38 79.30 Pima spot 03-46 115.02 123.39 127.77 92.38 Avg. price received by: Upland producers 86.50 84.50 78.40 69.00 Mill delivered: Cotton Actual 111.91 113.17 113.94 85.40 Raw fiber equivalent 124.34 125.74 126.60 94.89 Rayon staple Actual 104.00 104.00 104.00 102.00 Raw fiber equivalent 108.33 108.33 108.33 106.25 Polyester staple Actual 86.00 86.00 86.00 75.00 Raw fiber equivalent 89.58 89.58 89.58 78.13 Price ratios Percent Cotton/rayon 114.8 116.1 116.9 89.3 Cotton/polyester 138.8 140.4 141.3 121.5 Northern Europe cotton quotes: Cents per pound A Index 110.63 114.55 115.13 86.09 Memphis Territory 116.65 120.25 121.75 90.63 California/Arizona 121.30 124.63 124.17 89.75 B Index 108.67 111.41 108.96 83.73 Orleans/Texas 113.30 116.88 116.13 87.63 Wool prices (clean): Dollars per pound U.S. 56's 1.63 1.86 1.88 1.28 Australian 56's 1/ 2.62 2.64 2.51 1.86 U.S. 60's 1.99 2.26 2.29 1.61 Australian 60's 1/ 2.70 2.80 2.71 1.92 U.S. 64's 2.65 2.88 2.95 2.26 Australian 64's 1/ 3.02 3.02 3.07 2.49 ---------------------------------------------------------------------- NA = Not available. 1/ In bond, Charleston, SC. TEXTILE TRADE ---------------------------------------------------------------------- 1995 1994 ----------------------------- Item Jan Feb Mar Mar ---------------------------------------------------------------------- Imports: 1,000 pounds 1/ Yarn, thread, and fabric 207,274 174,571 205,476 200,741 Cotton 83,322 70,390 81,711 80,081 Linen 49,785 39,904 47,675 50,384 Wool 3,768 3,475 3,787 5,377 Silk 698 598 685 712 Manmade 69,700 60,204 71,618 64,187 Apparel 389,977 372,028 381,936 330,626 Cotton 219,992 216,721 224,816 191,704 Linen 15,729 13,455 10,858 11,025 Wool 11,028 9,858 10,880 8,281 Silk 14,211 12,046 10,936 13,852 Manmade 129,017 119,950 124,446 105,764 House furnishings 31,796 30,542 32,114 29,056 Cotton 24,130 22,597 23,439 22,226 Linen 195 161 269 156 Wool 127 93 147 130 Silk 6 31 20 28 Manmade 7,338 7,660 8,238 6,516 Floor covering 19,593 21,682 25,402 21,045 Cotton 3,791 3,312 4,459 5,995 Linen 2,866 2,734 3,034 2,590 Wool 5,733 8,100 9,253 6,166 Silk 367 475 437 298 Manmade 6,835 7,062 8,219 5,996 Total imports 2/ 655,998 605,543 652,042 587,770 Cotton 334,758 316,832 338,263 303,156 Linen 69,037 56,334 61,940 64,230 Wool 20,798 21,663 24,239 20,141 Silk 15,285 13,150 12,078 14,891 Manmade 216,119 197,565 215,522 185,352 Exports: 1,000 pounds 1/ Yarn, thread, and fabric 112,118 114,017 130,267 129,933 Cotton 37,305 38,007 44,774 36,676 Linen 2,673 3,067 3,194 2,936 Wool 3,332 3,365 3,388 2,799 Silk 887 1,606 1,509 1,240 Manmade 67,921 67,972 77,402 86,282 Apparel 75,380 89,926 109,166 79,253 Cotton 47,827 57,533 68,573 49,534 Linen 2,087 2,117 2,164 1,902 Wool 2,554 3,228 4,079 2,907 Silk 1,225 1,521 1,919 1,349 Manmade 21,688 25,528 32,431 23,561 House furnishings 4,096 4,434 6,124 5,789 Cotton 2,498 2,742 3,677 3,451 Linen 163 149 284 246 Wool 40 52 44 63 Silk 73 107 165 165 Manmade 1,322 1,384 1,954 1,864 Floor covering 26,558 23,688 27,136 27,935 Cotton 3,166 3,547 3,288 3,243 Linen 1,240 1,033 1,136 1,164 Wool 1,322 1,071 1,540 1,147 Silk 3/ --- --- --- --- Manmade 20,830 18,037 21,173 22,381 Total exports 2/ 218,453 232,317 273,022 243,227 Cotton 90,827 101,864 120,363 92,942 Linen 6,171 6,373 6,789 6,256 Wool 7,259 7,731 9,073 6,941 Silk 2,184 3,234 3,593 2,754 Manmade 112,011 113,115 133,204 134,334 ---------------------------------------------------------------------- 1/ Raw fiber equivalent. 2/ Includes headgear. 3/ Absence of trade. Note: January and February revised. END-END-END