2. 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

3. 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

4. Economic Growth in 2010

5. Low Consumer Confidence

6. Unemployment Remains High

7. CBO’s US Budget Deficit

8. 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

9. World Mill Use Rebounding 3% GDP

10. World Mill Use Rebounding 3% GDP 5% GDP

11. World Mill Use Rebounding 3% GDP 5% GDP -1% GDP

12. World Mill Use Rebounding 3% GDP 5% GDP -1% GDP 4% GDP

13. World Cotton Mill Use

14. Cotton Mill Use (Mil Bales) 07/0808/0909/1010/11 China51.545.046.848.0 India18.617.918.819.3 Pakistan12.011.512.112.5 Other Int’l36.833.133.534.0

15. US Cotton Mill Use

16. Prices Encouraging Acres

17. US Acreage Intentions 20092010 % Change Southeast1,8912,12312.2 Mid-South1,6271,7648.4 Southwest5,2435,7189.1 West24731226.6 All Upland9,0089,91610.1 ELS14217624.4 US Cotton 9,14910,09310.3

18. US Cotton Production

19. US Cottonseed Production

20. Int’l Cotton Area

24. Increased World Production

25. Cotton Imports China All Others

26. Cotton Imports China All Others

27. Cotton Imports China All Others

28. Cotton Exports US All Others

29. Cotton Exports US All Others

30. Cotton Exports US All Others

31. World Balance Sheet* 08/0909/1010/11Change Production107.5102.7113.911.2 Mill Use111.1114.6117.32.7 Trade30.234.235.61.4 Stocks60.951.550.6-0.9 * Unaccounted of -2.5 million bales

32. US Balance Sheet 08/0909/1010/11Change Production12.812.415.53.1 Mill Use3.63.4 0.0 Exports13.311.612.10.5 Stocks6.33.7 0.0

33. Stocks-to-Use Tightening China US

34. Cotton “A” Index

35. Stocks-to-Use vs Price A Index Stocks-to-Use

36. Issues to Watch US export pace and 09/10 ending stocks China and India production Can consumer spending sustain recovery? US $ and commodity prices