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USDA Cotton: World Markets and Trade


09 February 2012

USDA Cotton: World Markets and Trade - February 2012USDA Cotton: World Markets and Trade - February 2012

In 2010/11, production in the major Southern Hemisphere exporters of Australia, Brazil, and Argentina nearly doubled from levels seen just a few years ago.
USDA Cotton: World Markets and Trade Reports

Record Southern Hemisphere Supplies Influence U.S. Export Pattern

Monthly Share of Total Australia, Brazil, and Argentina Exports

Monthly Share of Total US Exports


In 2010/11, production in the major Southern Hemisphere exporters of Australia, Brazil, and Argentina nearly doubled from levels seen just a few years ago. Record exportable supplies increased their share of world trade to14 percent compared to a 37 percent average for the United States. Due to the seasonality of Southern Hemisphere harvests, higher supplies may pressure U.S. exports at the beginning and end of the August-July marketing year.

The Southern Hemisphere exporters have historically had an export pattern that is almost the mirror opposite of the United States, since their harvest comes several months later. Typically, Southern Hemisphere exports have been relatively high in the first part of the marketing year, reflecting new crop shipment. Exports also show a slight pickup at the end of the marketing year as the first of the new season crop becomes available. Record Southern Hemisphere exportable supplies in 2010/11 increased their exports in these periods, while U.S. exports were concentrated in the November-April period. Shipments in the first quarter of 2011/12 indicate that this pattern could be repeated this year.

Overview

With world supply higher and global consumption reduced marginally, ending stocks are higher. Trade is raised due to higher imports by China. U.S. domestic mill use is lowered. The season average farm price is unchanged.

Prices

Monthly Average Cotton Prices



The U.S spot price and the A-Index have shown little direction in the last month and trading volume remains low.

Trade Changes 2011/12

Major Exporters:

  • India is increased 250,000 bales to 6.25 million on reports of higher export registrations.
  • Argentina is raised 100,000 bales to 350,000 on recent activity.
  • Mexico is increased 100,000 bales to 350,000 due to the large crop.
  • Pakistan is raised 100,000 bales to 600,000 on recent shipments.
  • Malaysia is raised 250,000 to 375,000 on reported transshipments.

Major Importers:

  • China is increased by 1.0 million bales to 17.0 million on continued government stock building.
  • Thailand is decreased by 100,000 bales to 1.3 million as domestic use falls sharply due to the effects of last year’s floods.
  • Pakistan is lowered by 100,000 bales to 1.2 million on a larger crop.
  • Malaysia is raised 225,000 bales to 500,000 on reported transshipments.

February 2012

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