1. New Orleans, LA Thursday, January 11, 2007
U.S. Pima Marches to Beat
Of Growing Demand
Marketing & Economics Conference
New Orleans, LA Thursday, January 11, 2007
By: Matt Laughlin
J.G. Boswell Co.

2. Rising Demand for Pima Goods
More products made of ELS cottons
More products branded with Supima®
Expanded selection in apparel
Expanded selection in women’s apparel

3. Success Breeds Competition
Spinners looking for market niche
Manufacturers want their share
Opportunities created for producers
China wants it all

4. Pima Shines in the West Acala/upland acres on decline
Pima yields provide promise
Pima loan a safety net
Pima price potential

5. World ELS & LS Production
* ICAC Estimate, December 13, 2006

6. World ELS/LS Production in 2006/07* 3.233 Million Bales
* ICAC Estimate, December 13, 2006

7. World ELS/LS Exports in 2006/07* 1.595 Million Bales
* ICAC Estimate, December 13, 2006

8. World ELS Offtake /
* ICAC Estimate, December 13, 2006

9. World ELS & LS Ending Stocks 1995 - 2006
As you would expect, world ending stocks of ELS & LS cotton has been declining.
Actually, we think these world ending stocks are too high and will be adjusted lower by ICAC.
The fact remains that stocks are only 600,000 bales (130,000 metric ton). Down from over 1.8 million bales (392,000 metric tons) in 1997.
A 67% decrease.
* ICAC Estimate, December 13, 2006

10. World ELS/LS Ending Stocks & Stocks/Use Ratio
American Pima Ending Stocks:
The latest USDA estimate for ending stocks of American Pima is only 16,000 bales (3,500 metric tons)
This compares to over 300,000 bales (65,000 metric tons) only three years ago.
A stocks to use ratio from 65.5% in 2001 to a mere 1.9% today—I would expect this is the lowest stocks to use ratio ever recorded for American Pima cotton.
Conclusion:
Premium cotton and especially American Pima cotton has strong demand
Consumption from Pakistan, India, China, Indonesia, Japan, etc. are expected to be strong
ICAC Estimate, December 13, Listed in 480 lb bales

11. Egyptian ELS/LS Production 1994 – 2006
* ICAC Estimate, December 13, 2006

12. Chinese ELS Production 1994 – 2006
* ICAC Estimate, December 13, 2006

13. U.S. Pima Key Consuming Markets 2005/06
USDA, December 14, Listed in 480 lb bales

14. U.S. Pima Key Consuming Markets 2006/07
USDA, December 14, Listed in 480 lb bales

15. Total American Pima Offtake
USDA Estimate, December 11, Listed in 480 lb bales

16. Annual American Pima Exports
USDA Estimate, December 11, Listed in 480 lb bales

17. American Pima Ending Stocks VS Stocks/Use Ratio
Listed in 480 lb bales
* USDA Estimate, December 11, 2006

18. American Pima Production 1994 - 2006
USDA Estimate, December 11, Listed in 480 lb bales

19. 2006/07 American Pima Production Forecast
HARVESTED ACRES
YIELD
PRODUCTION
ARIZONA
7,000
891
13,000
CALIFORNIA
274,000
1,156
660,000
NEW MEXICO
775
21,000
TEXAS
30,000
560
35,000
TOTAL:
324,000
1,080
729,000
USDA Estimate, December 11, Listed in 480 lb bales

20. SJV Upland/Acala & Pima Yield
This chart shows world supply and consumption of Extra-Long Staple cotton for the past 10 years and an estimate for 2005.
1. Note that total offtake or consumption has exceeded total production in 9 out of the 11 years.

21. SJV Upland/Acala & Pima Acreage
This chart shows world supply and consumption of Extra-Long Staple cotton for the past 10 years and an estimate for 2005.
1. Note that total offtake or consumption has exceeded total production in 9 out of the 11 years.

22. U.S. Upland vs. Pima Price

23. ELS Competitiveness Payment
DATE
American Pima Far Eastern (1)
Giza 70 (2)
Giza 86 (3)
CIS (4)
12/22/06
119.00 NQ
109.50
12/25/06
12/26/06
12/27/06
12/28/06
WEEKLY AVERAGE:
Giza 70
Giza 86
CIS
Weekly Average Foreign Quote:
USDA Quality Differential:
(4.69)
8.11
22.42
Adjusted Weekly Average Foreign Quote:
117.61
Lowest Foreign Quote is Giza cents/lb
Average American Pima Far Eastern CNF Quote:
Lowest Adjusted Weekly Average Foreign Quote:
(117.61)
Theoretical ELS Competitiveness Payment 12/29 - 1/04:
1.39
USDA - FSA, December 28, 2006

24. Supima Licensing Program Growth Foreign & Domestic
* Licensee total as of December, 2006
A measure of Supima’s success can be reflected in the growth of the licensing program.
Since beginning to brand Supima and promote the Supima trademark in Japan in the mid 1980’s, Supima has experienced its most growth since the start of the millennium. It was at this time that Supima actively began advertising and working with licensees to promote the uniqueness of the American Pima fiber and its benefits. Supima initially started promoting a supply-push style of promotion campaign in that we worked with the spinning mills to promote Supima yarns to the knitters and weavers. A few years ago Supima changed the direction and implemented a demand-pull philosophy to work with the brands and retailers that wish to differentiate their product and use the Supima trademark to identify the uniqueness of their product. This strategy has been very successful as can been see here in the chart. The red bar to the right is the current level of licensees so far this year. This might look counter intuitive as that would not seem like any growth. In reality this is a very positive figure as the cost of the licensing program on an annual basis increased five fold over last year and as such the red bar indicates that even with a cost increase to the licensee, there is still tremendous value to the licensees to continue to promote their product as a Supima branded product.

25. Supima Licensees Australia 1 Japan 15 Bangladesh 2 Korea 5 Brazil
Mexico 3
Canada 4
Pakistan 18
China 21
Peru
France
Portugal 6
Germany
Switzerland
Hong Kong 34
Taiwan 7
India 30
Thailand
Indonesia 9
Turkey
Israel
United Arab Emirates
Italy
United Kingdom
United States 70

26. Total American Pima Offtake
Listed in 480 lb bales