1. U.S. and World Cotton Economic Outlook June 2002 Prepared by: Economic Services National Cotton Council

2. U.S. Real GDP Growth

3. World Real GDP Growth

4. U.S. Net Farm Income

5. Agricultural Spending

7. FED’s Major Currencies Dollar Index

8. Indices: Exchange Rate & Cotton Futures

9. U.S. 4134 Spot Price

10. U.S. 4134 Spot Price and “A” Index

11. U.S. Supply and Demand Million Bales Beginning Stocks6.0 Production20.3 Imports.0 Total Supply26.3 Mill Use7.6 Exports11.0 Total Offtake18.6 Ending Stocks7.7 Stocks-to-Use Ratio41.4% Million Bales Beginning Stocks6.0 Production20.3 Imports.0 Total Supply26.3 Mill Use7.6 Exports11.0 Total Offtake18.6 Ending Stocks7.7 Stocks-to-Use Ratio41.4% 2001/022001/022002/032002/03

12. U.S. Cotton Mill Use

13. Average Daily Mill Use

14. Net Domestic Cotton Consumption

15. U.S. Cotton Textile & Apparel Exports

17. U.S. Cotton Textile & Apparel Imports

19. Price Relationships Since Aug. ‘01

20. U.S. Cotton Exports

21. Top Customers for U.S. Raw Cotton 1990 County(000 Bales) Japan1,538 China1,347 Korea1,185 Indonesia 552 Italy 424 Taiwan 354 1990 County(000 Bales) Japan1,538 China1,347 Korea1,185 Indonesia 552 Italy 424 Taiwan 354 2001YTD Country(000 Bales) Mexico2,393 Turkey 1,541 India 1,057 Indonesia1,040 Taiwan 823 Thailand 736

22. U.S. Ending Cotton Stocks

23. Price Relationships Since Aug. ‘01

24. U.S. Supply and Demand Million Bales Beginning Stocks6.07.7 Production20.317.8 Imports.0.0 Total Supply26.325.5 Mill Use7.6 Exports11.0 Total Offtake18.6 Ending Stocks7.7 Stocks-to-Use Ratio41.4% Million Bales Beginning Stocks6.07.7 Production20.317.8 Imports.0.0 Total Supply26.325.5 Mill Use7.6 Exports11.0 Total Offtake18.6 Ending Stocks7.7 Stocks-to-Use Ratio41.4% 2001/022001/022002/032002/03

25. September Corn Futures

26. November Soybean Futures

27. December Cotton Futures

28. NYBOT Dec. Contracts since 8/1/00

29. Southeast3,610 3,548 -1.7 Mid-South 4,595 4,015 -12.6 Southwest6,312 6,028 -4.5 West1,010 905 -10.4 ALL UPLAND 15,527 14,496 -6.6 ALL ELS261 275 5.3 ALL COTTON15,788 14,771 -6.4 2002 U.S. Planting Intentions 20012002% Actual Intended Change Actual Intended Change Thousand Acres

30. U.S. Supply and Demand Million Bales Beginning Stocks6.07.7 Production20.317.8 Imports.0.0 Total Supply26.325.5 Mill Use7.67.8 Exports11.011.0 Total Offtake18.618.8 Ending Stocks7.7 Stocks-to-Use Ratio41.4% Million Bales Beginning Stocks6.07.7 Production20.317.8 Imports.0.0 Total Supply26.325.5 Mill Use7.67.8 Exports11.011.0 Total Offtake18.618.8 Ending Stocks7.7 Stocks-to-Use Ratio41.4% 2001/022001/022002/032002/03

31. U.S. Cotton Mill Use

32. U.S. Cotton Exports

33. India and Pakistan Net Trade

34. Chinese Net Trade ? ?

35. Begin Stock12,500 11,590 Production 20,600 21,150 20,655 Imports1,800 2,000 1,375 Total Supply34,900 34,740 Mill Use 25,700 25,000 24,300 Exports200 200 230 End. Stocks8,900 9,540 2002/03 Chinese Estimates ICAC USDA Cotlook ICAC USDA Cotlook

36. U.S. Supply and Demand Million Bales Beginning Stocks6.07.7 Production20.317.8 Imports.0.0 Total Supply26.325.5 Mill Use7.67.8 Exports11.011.0 Total Offtake18.618.8 Ending Stocks7.76.7 Stocks-to-Use Ratio41.4%35.6% Million Bales Beginning Stocks6.07.7 Production20.317.8 Imports.0.0 Total Supply26.325.5 Mill Use7.67.8 Exports11.011.0 Total Offtake18.618.8 Ending Stocks7.76.7 Stocks-to-Use Ratio41.4%35.6% 2001/022001/022002/032002/03

37. World Supply and Demand Million Bales Beginning Stocks40.144.8 Production98.091.0 Total Supply138.0135.8 Mill Use93.595.5 Ending Stocks44.840.6 Stocks-to-Use Ratio47.9%42.5% Million Bales Beginning Stocks40.144.8 Production98.091.0 Total Supply138.0135.8 Mill Use93.595.5 Ending Stocks44.840.6 Stocks-to-Use Ratio47.9%42.5% 2001/022001/022002/032002/03

38. World Cotton Production

40. World Cotton Mill Use

42. World Cotton Exports

44. Foreign Cotton Stocks, Net China

45. Farm Bill Impacts DEMAND STIMULUSDEMAND STIMULUS –Elimination of Step 2 threshold of 1.25 cents –Adds 400 - 500,000 bales PRODUCTION NEUTRALPRODUCTION NEUTRAL –Payments are decoupled from planting DEMAND STIMULUSDEMAND STIMULUS –Elimination of Step 2 threshold of 1.25 cents –Adds 400 - 500,000 bales PRODUCTION NEUTRALPRODUCTION NEUTRAL –Payments are decoupled from planting

46. U.S. Upland Planted Area

47. Grower Receipts

48. Merchants Ginners Crushers Producers Cooperatives Warehouses Manufacturers