cotton economic report ncc mid-year board meeting august 17-19, 2005 prepared by: economic services...
TRANSCRIPT
Cotton Economic ReportCotton Economic Report
NCC Mid-Year Board MeetingNCC Mid-Year Board MeetingAugust 17-19, 2005August 17-19, 2005
Prepared by:Prepared by:
Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council
Cotton Economic ReportCotton Economic Report
NCC Mid-Year Board MeetingNCC Mid-Year Board MeetingAugust 17-19, 2005August 17-19, 2005
Prepared by:Prepared by:
Economic ServicesEconomic ServicesNational Cotton CouncilNational Cotton Council
Macroeconomic SituationMacroeconomic Situation
• Global economic growth for ’05 Global economic growth for ’05 forecasts at 4%forecasts at 4%– Down from last year’s level of 5.1%Down from last year’s level of 5.1%
• US economy grew at 3.8% in Q1 and US economy grew at 3.8% in Q1 and preliminary estimate for Q2 is 3.4%preliminary estimate for Q2 is 3.4%– Unemployment at 5%, below year-ago levelUnemployment at 5%, below year-ago level
• Oil prices at record levelsOil prices at record levels
• Global economic growth for ’05 Global economic growth for ’05 forecasts at 4%forecasts at 4%– Down from last year’s level of 5.1%Down from last year’s level of 5.1%
• US economy grew at 3.8% in Q1 and US economy grew at 3.8% in Q1 and preliminary estimate for Q2 is 3.4%preliminary estimate for Q2 is 3.4%– Unemployment at 5%, below year-ago levelUnemployment at 5%, below year-ago level
• Oil prices at record levelsOil prices at record levels
Dollars per Barrel
30
40
50
60
70
Jan
-04
Feb
-04
Mar
-04
May
-04
Jun
-04
Au
g-0
4
Sep
-04
Oct
-04
Dec
-04
Jan
-05
Mar
-05
Ap
r-05
Jun
-05
Jul-
05
U.S. Crude Oil Spot Price U.S. Crude Oil Spot Price
Cents per Gallon
80
110
140
170
200
Jan
-04
Feb
-04
Mar
-04
May
-04
Jun
-04
Au
g-0
4
Sep
-04
Oct
-04
Dec
-04
Jan
-05
Mar
-05
Ap
r-05
Jun
-05
Jul-
05
U.S. #2 Diesel, Gulf Coast U.S. #2 Diesel, Gulf Coast
U.S. Cotton U.S. Cotton Production & UseProduction & Use
SoutheastSoutheast 2,956 2,956 3,008 3,008 1.81.8Mid-SouthMid-South 3,430 3,430 3,880 3,880 13.1 13.1 SouthwestSouthwest 6,155 6,155 6,120 6,120 -0.6 -0.6 WestWest 868 868 795 795 -8.4 -8.4
ALL UPLANDALL UPLAND 13,40913,409 13,80313,803 2.92.9
ALL ELSALL ELS 250 250 266 266 6.6 6.6
ALL COTTONALL COTTON 13,659 13,659 14,069 14,069 3.03.0
SoutheastSoutheast 2,956 2,956 3,008 3,008 1.81.8Mid-SouthMid-South 3,430 3,430 3,880 3,880 13.1 13.1 SouthwestSouthwest 6,155 6,155 6,120 6,120 -0.6 -0.6 WestWest 868 868 795 795 -8.4 -8.4
ALL UPLANDALL UPLAND 13,40913,409 13,80313,803 2.92.9
ALL ELSALL ELS 250 250 266 266 6.6 6.6
ALL COTTONALL COTTON 13,659 13,659 14,069 14,069 3.03.0
2005 U.S. Cotton Acreage2005 U.S. Cotton Acreage
20042004 20052005 %% Actual Actual Estimate Estimate ChangeChange
20042004 20052005 %% Actual Actual Estimate Estimate ChangeChange
Thousand AcresThousand AcresThousand AcresThousand Acres
50
55
60
65
70
75
80
85
Jun
-07
Jun
-14
Jun
-21
Jun
-28
Jul-
06
Jul-
12
Jul-
19
Jul-
26
Au
g-0
2
Au
g-0
9
Au
g-1
6
Au
g-2
3
Au
g-3
0
Sep
-06
Sep
-13
Sep
-20
Sep
-27
Oct
-04
Oct
-11
Oct
-11
50
55
60
65
70
75
80
85
Jun
-07
Jun
-14
Jun
-21
Jun
-28
Jul-
06
Jul-
12
Jul-
19
Jul-
26
Au
g-0
2
Au
g-0
9
Au
g-1
6
Au
g-2
3
Au
g-3
0
Sep
-06
Sep
-13
Sep
-20
Sep
-27
Oct
-04
Oct
-11
Oct
-11
U.S. Cotton Crop ConditionU.S. Cotton Crop ConditionIndex Based on RatingsIndex Based on Ratings
10-Yr Hi
10-Yr Lo
‘03 (730 #/ac)
‘04 (855 #/ac)
‘05 (USDA @ 748 #/ac)
U.S. Cotton SupplyU.S. Cotton SupplyMillion Bales
2.7 2.6 4.0 3.9 3.9 3.96.0 7.4
5.43.5
6.5
17.918.9 18.8
13.9
17.0 17.2
20.317.2
18.3
23.321.3
0
5
10
15
20
25
30
95 96 97 98 99 00 01 02 03 04 05f
Beg Stocks Imports Production
U.S. Cotton DemandU.S. Cotton Demand
Million 480 Lb Bale Equivalents
21.2
0
5
10
15
20
25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Million 480 Lb Bale Equivalents
21.2
0
5
10
15
20
25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
U.S. Cotton Retail ConsumptionU.S. Cotton Retail Consumption
2005
2004
Million 480 Lb Bale Equivalents
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Million 480 Lb Bale Equivalents
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
U.S. Cotton Textile Imports from ChinaU.S. Cotton Textile Imports from China
2005
2004
Active China SafeguardsActive China Safeguards
Description % Filled As Of% Change from Year Ago
Jan. – June (Official)
Cotton, Wool, & MMF Socks 100% May 12,2005 81%
Cotton Knit Shirts 100% July 5, 2005 1606%
Cotton Trousers 100% July 8, 2005 1765%
Cotton & MMF Underwear 100% July 5, 2005 515%
Combed Cotton Yarn 19.9% Aug. 8, 2005 26%
M&B Cotton & MMF Shirts, Not Knit
95.6% Aug. 8, 2005 343%
MMF Knit Shirts 100% July 12, 2005 489%
MMF Trousers 100% Aug. 3, 2005 369%
Million 480 Lb Bale Equivalents
0
2
4
6
8
10
12
14
16
18
20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Million 480 Lb Bale Equivalents
0
2
4
6
8
10
12
14
16
18
20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
U.S. Cotton Textile Imports from ROWU.S. Cotton Textile Imports from ROW
2005
2004
Million 480 Lb Bale Equivalents
0
1
2
3
4
5
6
7
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Million 480 Lb Bale Equivalents
0
1
2
3
4
5
6
7
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
U.S. Cotton Mill UseU.S. Cotton Mill Use
2005
2004
Million Bales
10.611.1 11.3
10.4 10.2
8.9
7.77.3
6.2 6.35.8
0
2
4
6
8
10
12
95 96 97 98 99 00 01 02 03 04 05f
Million Bales
10.611.1 11.3
10.4 10.2
8.9
7.77.3
6.2 6.35.8
0
2
4
6
8
10
12
95 96 97 98 99 00 01 02 03 04 05f
U.S. Cotton Mill UseU.S. Cotton Mill Use
The Int’l Market The Int’l Market & Trade& Trade
Million Bales
88.5
101.896.6
106.2
60
70
80
90
100
110
95 96 97 98 99 00 01 02 03 04 05f
Production Use
Million Bales
88.5
101.896.6
106.2
60
70
80
90
100
110
95 96 97 98 99 00 01 02 03 04 05f
Production Use
Foreign Cotton Production & UseForeign Cotton Production & Use
Change in ‘05 ProductionChange in ‘05 Production
-4.0 -3.0 -2.0 -1.0 0.0 1.0
China
India
Pakistan
Turkey
Australia
Uzbek
W Africa
Mexico
Million Bales
-4.0 -3.0 -2.0 -1.0 0.0 1.0
China
India
Pakistan
Turkey
Australia
Uzbek
W Africa
Mexico
Million Bales
Change in ‘05 Mill UseChange in ‘05 Mill Use
-1.0 0.0 1.0 2.0 3.0 4.0
China
India
Pakistan
B'desh
Turkey
Vietnam
Brazil
EU
Million Bales-1.0 0.0 1.0 2.0 3.0 4.0
China
India
Pakistan
B'desh
Turkey
Vietnam
Brazil
EU
Million Bales
World Cotton TradeWorld Cotton Trade
Million Bales
14.516.1
13.810.7
14.6 13.917.4 17.1
22.2 21.2
27.6
32.3
38.4
0
10
20
30
40
95 96 97 98 99 00 01 02 03 04 05f
Million Bales
14.516.1
13.810.7
14.6 13.917.4 17.1
22.2 21.2
27.6
32.3
38.4
0
10
20
30
40
95 96 97 98 99 00 01 02 03 04 05f
Imports by Top-10 US Cust.
Total Imports
World Cotton TradeWorld Cotton Trade
Million Bales
14.516.1
13.810.7
14.6 13.917.4 17.1
22.2 21.2
27.6
7.7 6.9 7.54.3
6.8 6.7
11.0 11.913.8 14.0 15.0
32.3
38.4
0
10
20
30
40
95 96 97 98 99 00 01 02 03 04 05f
Million Bales
14.516.1
13.810.7
14.6 13.917.4 17.1
22.2 21.2
27.6
7.7 6.9 7.54.3
6.8 6.7
11.0 11.913.8 14.0 15.0
32.3
38.4
0
10
20
30
40
95 96 97 98 99 00 01 02 03 04 05f
Total Imports
US Exports
Imports by Top-10 US Cust.
Ending Stocks & PricesEnding Stocks & Prices
U.S. Cotton Ending StocksU.S. Cotton Ending Stocks
Million Bales
2.6
4.0 3.9 3.9 3.9
6.0
7.4
5.4
3.5
6.57.0
0
1
2
3
4
5
6
7
8
95 96 97 98 99 00 01 02 03 04 05f
Million Bales
2.6
4.0 3.9 3.9 3.9
6.0
7.4
5.4
3.5
6.57.0
0
1
2
3
4
5
6
7
8
95 96 97 98 99 00 01 02 03 04 05f
World Cotton Ending StocksWorld Cotton Ending Stocks
Million Bales
0
10
20
30
40
50
60
95 96 97 98 99 00 01 02 03 04 05f
China All Others
Million Bales
0
10
20
30
40
50
60
95 96 97 98 99 00 01 02 03 04 05f
China All Others
Cents/Pound
40
45
50
55
60
65
70
75
80
Jan
-04
Feb
-04
Mar
-04
May
-04
Jun
-04
Au
g-0
4
Sep
-04
Oct
-04
Dec
-04
Jan
-05
Mar
-05
Ap
r-05
Jun
-05
Jul-
05
A(FE) Nearby NY
Cotton PriceCotton Price
SummarySummary
• Smaller world cropSmaller world crop – But not as small as originally thoughtBut not as small as originally thought
• Demand picture looks optimisticDemand picture looks optimistic– Should exceed productionShould exceed production– Cotton prices relative to polyesterCotton prices relative to polyester
• China expected to purchase record China expected to purchase record amount from world marketamount from world market
• Stocks continue to hang over the Stocks continue to hang over the marketmarket
• Smaller world cropSmaller world crop – But not as small as originally thoughtBut not as small as originally thought
• Demand picture looks optimisticDemand picture looks optimistic– Should exceed productionShould exceed production– Cotton prices relative to polyesterCotton prices relative to polyester
• China expected to purchase record China expected to purchase record amount from world marketamount from world market
• Stocks continue to hang over the Stocks continue to hang over the marketmarket
MerchantsMerchantsGinnersGinnersCottonseedCottonseed
ProducersProducers
CooperativesCooperatives
WarehousesWarehousesManufacturersManufacturers