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World Over View
World Cotton
Stocks Projected Lowest in 9 Years
The latest U.S. Department of Agriculture (USDA) cotton
forecast for 2003/04 indicates that near-record global
cotton consumption is reducing world ending stocks to
their lowest since 1994/95. Although global cotton
production is forecast 5 percent higher this season at
92.7 million bales, world consumption is projected at
97.2 million. As a result, 2003/04 ending stocks are
expected to decline 4.3 million bales or 12 percent.
At about 32.5 million bales, world ending stocks are
projected to equal 33.5 percent of global consumption in
2003/04, 4 percentage points below 2002/03 and the
lowest since 1993/94. Just as important, however, is the
stock reduction occurring in China. With consumption
expanding significantly in China, stocks there as a
share of world consumption have fallen dramatically from
1998/99 to 7 percent this season, the lowest since
1993/94. Meanwhile, the United States accounts for its
lowest share in 4 years- about 4.5 percent..
Production Constrained in 2003/04
While world production rose 4 million bales from the
year before in 2003/04, production in a number of
countries was below potential in part due to weather.
World cotton production in 2003/04 was 5 percent higher
than in 2002/03, in large part in response to a
30-percent increase in cotton prices during 2002/03, but
this increase was below average compared with earlier
years.
Since 1987/88, world production has typically risen by
about two-thirds as much as the previous year's world
price increase. This would have been about a 20-percent
increase in production rather than a 5- percent
increase. Corn and soybean prices in 2002/03 rose faster
than they have during previous times that cotton prices
rose, but not enough to account for all of the
difference. Favorable weather in the United States,
India, and West Africa's Franc Zone boosted production
in 2003/04, but output suffered in China, Australia, and
Uzbekistan.
Perhaps the largest weather shock suffered by world
cotton production in 2003/04 occurred in China. China's
National Bureau of Statistics reportedly confirmed its
earlier estimate of cotton output, about 22.4 million
bales. This suggests yields fell about 19 percent
compared with a year earlier, corresponding to this
year's unprecedented late season rainfall in China's
prime eastern growing regions.
Australia's output was also significantly constrained by
weather as drought there continued through the planting
of the 2003/04 crop. While Australia's 1999-01 output
averaged about 3.5 million bales, the 2003/04 crop is
expected to total only 1.3 million due to the depletion
of reservoirs there following several years of reduced
precipitation.
Uzbekistan's output fell 400,000 bales from the year
before in 2003/04 in large part due to a cool, late
spring. Although weather improved later in the season,
the crop's poor start and reduced area limited output to
4.2 million bales, the lowest in recent memory.
USDA |
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Pakissan.com;
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