Outlook for World Cotton Supply and Use Armelle Gruère, ICAC ABARE’s Outlook 2010 Conference March 2, 2010

Outlook for World Cotton Supply and Use 1.A Bright Short-Term Outlook 2.A More Nuanced Long-term Outlook

A BRIGHT SHORT-TERM OUTLOOK

Growth in World Cotton Mill Use Growth in World GDP

Cotton Consumption Million tons

World Cotton Production and Mill Use Production Consumption

Cotton Production Million tons

Cotlook A Index Season-average (US cents/lb)

Price Ratios at Planting Time Cotton to: Maize, Soy, Wheat, Rice and Sugar Price Ratio

2000 = 100 Crude Oil Prices Fertilizer Prices 2000 = 100

World Cotton Area and Yield Million hectaresKg/ha Area Yield

Cotton Production Million tons

World Cotton Imports Million tons

Cotton Exports Million tons

Share of Asia in the World Total Mill Use Production Imports

Cotton Exports

Global Coton Ending Stocks Million tons

A MORE NUANCED LONG- TERM OUTLOOK

World Cotton Production and Consumption Million Tons

Cotton/Grain Price Ratios Index: 1990 = 100

World Cotton Area Million Ha

World Cotton Yields Kg per Hectare

World End-Use Textile Fiber Consumption by Fibers Million tons

Cotton’s Share of World End- Use Textile Fiber Consumption Percent Average

Relative Cotton Prices*

Cotlook A Index (Nominal) Season Average (US cents/lb)

Cotlook A Index (Real) Season Average (2008 = 100)

Conclusions A bright short-term cotton outlook: –Recovering mill use –Tightening stocks –Firm prices A more nuanced long-term outlook: –Slow growth in production –Continued competition with polyester –Higher nominal prices but declining real prices