Production and Consumption Rising in 2010/11
2010/11 world cotton production is forecast at 24.2 million tons up nearly
10%. 2010/11 production in China is forecast at 7.7 million tons, one million
tons higher than in the current season. Most of the gain is expected to come
from increased area in response to higher domestic prices. 2010/11 Production
in India is estimated little changed from 2009/10 as most of the gain in
yields tied to improved technology has already been achieved. U.S. production
is expected to climb by one-tenth to reach three million tons, primarily
because of increased cotton area. Production in Pakistan, Brazil and
Uzbekistan, collectively, is estimated at 4.6 million tons in 2010/11. The
three countries are accounting for 4.3 million tons of production in 2009/10.
Forecasts by the IMF, UNCTAD, the U.S. Federal Reserve and OECD all indicate
that the recovery in world GDP growth during 2010 and 2011 will be gradual.
Accordingly, since income growth is an important explanatory variable in
models of fiber use, projections of world fiber use at the consumer level for
2010 and 2011 indicate only modest growth.
Based on the expected change in the ratio of ending stocks to use outside
China and the average Cotlook A Index to date, the 2009/10 Cotlook A Index is
estimated at 70 cents per pound. The 95% confidence level extends from 64
cents to 77 cents.
WORLD COTTON SUPPLY AND DISTRIBUTION
2008/09 2009/10 2010/11 2008/09 2009/10 2010/11
Million Tons Million Bales
Production 23.40 22.2 24.1 107.5 102 111
Consumption 23.24 23.8 24.2 106.7 109 111
Exports 6.56 7.1 6.9 30.1 33 32
Ending Stocks 12.34 10.75 10.75 56.7 49 49
Cotlook A Index* 61.20 70** 61.20 70**
* Season-average Cotlook A Index (U.S. cents per pound).
** The price projection for 2009/10 is based on the ending
stocks/consumption ratio in the world-less-China in 2007/08 (estimate), in
2008/09 (estimate) and in 2009/10 (projection), on the ratio of Chinese net
imports to world imports in 2008/09 (estimate) and 2009/10 (projection), and
on the average price for the first four months of 2009/10. 95% confidence
interval: 64 to 77 cents per pound.
