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US cotton ouput likely to surge by 50% over 2009

14 Jul '10
5 min read

Cotton Demand and Stocks Revised for 2010/11; Unchanged for 2009/10 As the beginning of 2010/11 approaches, projections of demand for the upcoming season were increased along with the sizable gain expected in supply. In July, total U.S. cotton demand was forecast at 17.7 million bales, nearly 2 million bales above the 2009/10 estimate. While U.S. mill use was increased 100,000 bales (3 percent) this month to 3.4 million bales—the same as in 2009/10 exports were raised 800,000 bales (6 percent) to 14.3 million—2 million bales above 2009/10.

Strong foreign demand and continued tight world supplies are projected to boost the U.S. share of world trade. With the United States accounting for about half of the 2010/11 increase in global production, the U.S. share of world trade is expected to rise to nearly 39 percent, slightly above the 2007-09 average. Similarly, the U.S. share of global consumption is expected to rise slightly in 2010/11. As 2009/10 draws to a close, U.S. cotton disappearance (exports plus mill use) is accounting for approximately 13.5 percent of world consumption, the lowest in over 2 decades. In 2010/11, however, the projection for increased U.S. demand is expected to push this share to about 15 percent, similar to the 2006-2008 seasons.

Based on the latest supply and demand estimates, 2010/11 stocks are expected to rise from 2.9 million bales when the season starts on August 1, 2010, to 3.5 million bales at season's end. Just as actual stocks are projected to rise slightly in 2010/11, the stocks-to-use ratio is also forecast to increase from 18.5 percent in 2009/10 to nearly 20 percent in 2010/11. Meanwhile, farm prices for 2010/11 are likely to exceed the 2009/10 estimate. Upland prices are projected to range between 60 and 74 cents per pound in 2010/11, compared with a 62.5-cent average estimated for 2009/10.

U.S. Department of Agriculture (USDA)

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