Stocks Remain Tight; Season-Average Price Range Narrowed
With 2010/11 U.S. cotton demand expected to exceed production, stocks are projected to decrease for the third consecutive season. In 2010/11, U.S. ending stocks are currently forecast at 1.9 million bales, 1 million bales below last season and significantly below the 2007/08's level of 10.1 million bales. In addition, the current stock forecast would be the lowest since the 1924 season and represents a record-low stocks-to-use ratio of 10 percent.
As a result, upland cotton farm prices are considerably higher this season as are futures prices. Farm prices began the season at 77 cents per pound but as of mid- February had climbed to 88 cents; at the same time, the gap between the farm price and nearby futures continued to grow, with nearby futures averaging $1.85 per pound in February. For 2010/11, the average farm price is currently forecast to range between 80 and 83 cents per pound, compared with the 2009/10 average of 62.9 cents per pound.
U.S. Retail Cotton Consumption Expands in 2010
U.S. calendar year 2010 domestic cotton consumption (mill use plus net textile imports) increased for the first time in 4 years, reaching 9.8 billion (raw-fiberequivalent) pounds. This level represents a 10-percent growth over 2009, which had declined to a 12-year low.
The 2010 increase was largely the result of a rebound in cotton product imports, as U.S. mill use and product exports while both higher were nearly offsetting. U.S. cotton product imports reached 9.9 billion pounds in 2010, the largest in 3 years; meanwhile, cotton product exports rose to 1.8 billion pounds, similar to 2008. As a result, the per capita estimate of retail consumption increased from a 17-year low of 29 pounds per person in 2009 to nearly 32 pounds in 2010.
U.S. Department of Agriculture
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