Slowing Cotton Fundamentals

WASHINGTON - Mar 11/08 - SNS -- The world cotton forecasts for 2007-08 show lower production, consumption, and trade relative to last month, with ending stocks raised 3% to a forecast 59.16 million 480-pound bales, according to the latest supply and demand forecasts from the USDA's World Agricultural Outlook Board.

Production is reduced for China, Brazil, and Turkey, but raised for Pakistan. World consumption is reduced 1.5% from last month, mainly in China, India, and Turkey, due to weaker than anticipated textile demand combined with higher cotton prices relative to polyester.

World trade overall is reduced more than 1.0 million bales due to a reduction in China's imports. Exports are reduced for the United States, Brazil, and others, but raised for India, which has increased exportable supplies. World ending stocks are forecast at 59.2 million bales, down 3% from the beginning level.

For the United States, the USDA's 2007-08 U.S. cotton forecasts include sharply lower exports, resulting in a 15% increase in ending stocks compared with last month. Production and domestic mill use are unchanged. Exports are lowered 1.2 million bales to 14.5 million due to a combination of lower import demand by China and Turkey and greater competition for market share from India. Ending stocks are raised to 9.4 million bales, marginally below the beginning level.

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