2010 Outlook in Brief A Year for Recovery –Economic growth projected to continue –Cotton demand improving –US acres and production reverse 3 years of decline –Further tightening in the balance sheet
Key Assumptions Farm & Trade Policy –Generally assume current policies remain in place during the timeframe of the outlook For US, the ‘08 farm bill India MSP and China import policy unchanged General Economy –International Monetary Fund released projections in January
Economic Growth in 2010
Low Consumer Confidence
Unemployment Remains High
CBO’s US Budget Deficit
Cotton Demand Yarn Values Improving –Cotlook Yarn Index up 25% from year-ago levels and 7% higher than Sep ’08 Textile Trade Up in Recent Months –After peaking at $55 billion in Jul ’08, world textile exports fell to $36 billion in May ’09 –Values in the low $40 billion’s in recent months
World Mill Use Rebounding 3% GDP
World Mill Use Rebounding 3% GDP 5% GDP
World Mill Use Rebounding 3% GDP 5% GDP -1% GDP
World Mill Use Rebounding 3% GDP 5% GDP -1% GDP 4% GDP
World Cotton Mill Use
Cotton Mill Use (Mil Bales) 07/0808/0909/1010/11 China India Pakistan Other Int’l
US Cotton Mill Use
Prices Encouraging Acres
US Acreage Intentions % Change Southeast1,8912, Mid-South1,6271, Southwest5,2435, West All Upland9,0089, ELS US Cotton 9,14910,
US Cotton Production
US Cottonseed Production
Int’l Cotton Area
Increased World Production
Cotton Imports China All Others
Cotton Imports China All Others
Cotton Imports China All Others
Cotton Exports US All Others
Cotton Exports US All Others
Cotton Exports US All Others
World Balance Sheet* 08/0909/1010/11Change Production Mill Use Trade Stocks * Unaccounted of -2.5 million bales
US Balance Sheet 08/0909/1010/11Change Production Mill Use Exports Stocks
Stocks-to-Use Tightening China US
Cotton “A” Index
Stocks-to-Use vs Price A Index Stocks-to-Use
Issues to Watch US export pace and 09/10 ending stocks China and India production Can consumer spending sustain recovery? US $ and commodity prices