USDA Forecast Smaller World Cotton Crop

WASHINGTON - Jun 10/09 - SNS -- Cotton production is expected to decline in 2009-10 from an estimated 169.17 million 480 pound bales this season to 167.41 million, according to the latest supply and demand outlook from the USDA's World Agricultural Outlook Board.

World ending stocks in 2009-10 are reduced by 1.2 million bales, mainly reflecting lower beginning stocks. Total production, consumption, and trade are revised marginally. Consumption and imports are lowered for China, as government policies are likely to continue to support prices by channeling demand to government-held stocks; at the same time, imports are raised for Pakistan due to recent indications of stronger consumption.

This month's U.S. 2009-10 cotton forecasts show lower beginning stocks offset by lower exports, leaving ending stocks unchanged from last month. The production estimate and domestic mill use also are unchanged. Exports are reduced 200,000 bales to 10.8 million, due mainly to lower import demand by China, combined with greater competition from Uzbekistan. The forecast range for the marketing year average price received by producers is 48 to 60 cents per pound, the same as last month.

For 2008-09, U.S. exports are raised 200,000 bales to 12.7 million, based on recent activity, and ending stocks are reduced accordingly. The forecast marketing-year average price received by producers is 49 cents per pound, compared with a range of 48 to 50 cents last month. The world 2008-09 estimates show lower production and higher consumption, resulting in lower ending stocks. Production is lowered in India and Brazil, while consumption is raised in Pakistan.

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