American Cotton Company (CI): Cotton Economic Monthly March 09
Cotton prices have declined since the publication of the US Department of Agriculture Report on last month's bearish market (New York's recent price dropped from 49.98 to 41.82 cents / pound, down 15%). Despite the findings of the US National Cotton Council's planting intentions survey, it is predicted that a larger decrease in the average planting area in the United States (from 9 million 500 thousand acres of 2008/09 to 8 million 100 thousand acres of 2009/10, a decrease of 14.4%), but the downward trend in cotton prices has not stopped.
The rising unemployment rate and further losses in the financial markets continue to push consumer confidence to a record low. In addition, the downturn in demand caused by weak textile consumption still has a sustained impact on prices. In February, Dow Jones dropped another 11%, and its market value dropped 50% compared with October 2007.
股市和房市的雙重低靡導致眾多消費者將大部分的自由支配收入改向于儲蓄以彌補他們的財產損失并為應對潛在的解雇影響提供緩沖作用。其結果是，儲蓄率已急劇上升并在一月份中達到5%（自1995年以來的最高水平），而消費者的年同比服裝消費量已經連續(xù)6個月為負數。
Like other recent reports, the number of figures released by the US Department of agriculture in March is a negative correction in the balance sheet consumption (Global - 150 million packages), which is negatively related to the consumption of last month, and the 2008/09 world consumption is currently estimated at 111 million 100 thousand packages (down 9.5% from 2007/08). The largest number of amendments is China (- 500 000 bags), followed by India (- 200 000 bags), the United States (- 10. 5 Wan Bao), Bangladesh (- 100 000 bags), Brazil (- 100 000 bags) and Taiwan (- 100 000 bags).
The output of the balance sheet was also revised down (865 thousand to 1 billion, 8 million 600 thousand packs). Most of the changes were due to a substantial reduction in China's production estimate (- 70 million packages). Matching the decrease in China's production figures is the expected increase in China's imports (500 thousand bales), which is believed to have originated from US exports. It is precisely because of the increase in the volume of exports that 2008/09's share of world exports increased (from 2007/08 to 35.5% of the world's total to 41.3% of 2008/09).
The factor contributing to the increase in us share is the increase of 30 to forty five percent of the lowest supporting price in India this year. Because of its fall in world market prices this fall, it ensured that domestic prices in India were higher than those in the world market. Combined with the reduction in global demand for cotton, the price difference may lag behind the revised estimate of India's export volume of 500 thousand packets this month.
The weak demand also led to a further relaxation of the global stock to consumption ratio (from 54.8% to 56.3%, indicating a lack of basic factors supporting prices).
According to the preliminary cotton outlook of 2009/10 of the US Department of agriculture, the last possible basic factors in 2009/10 may become more intense, reflecting the wishes of farmers to produce other crops. The report represents the next harvest year, with a decrease in cotton planting area around the world and the United States (10.5% to 8 million 500 thousand acres in the US). As a result, world production is expected to drop by 1.5% to 107 million packages.
Meanwhile, the economic recovery is expected to start in the second half of 2009, and the global consumption forecast will increase by 2.1% in the 2009/10 harvest year. Although these projections reflect the tightening of basic factors to a certain extent, they are not absolutely reliable.
In terms of supply, the factors that affect it include the accumulation of inventory (especially in China and India) and how to reduce inventory. The uncertainty of the time and degree of economic recovery is an important factor affecting demand.
Editor in chief: Xu Qiyun
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