With the downturn in the cotton industry there is still good reason to think things could turn around this year. The National Cotton Council set world cotton production at 105.5 million bales, which is 4.3 million less than last year and the smallest crop since 2003. But world mill use will recover to 113.8 million bales. This increase in use could lower cotton stocks to 56.3 million bales, a reduction of 5.9 million.
National Cotton Council Economist Dr. Gary Adams cautions, however, that these projections are dependent on the wildcards of overall global economic performance and impacts of policy changes. Adams points out that the governments of China and India have made policy decisions that have moved significant amounts of the 2008 crop into government stocks. How they handle the release of those stocks will affect U.S. exports.
Textile mills are now submitting the necessary documentation to receive 4 cents per pound on their cotton consumption through economic assistance included in the 2008 Farm Bill. Adams says the government has begun monitoring certain U.S. textile and apparel imports from China in a move aimed at preventing a repeat of the disruptive surge of Chinese textile/apparel exports to this country following the discontinuation of quotas in 2005.
Powered by iNet Solutions Group ©2011 All Rights Reserved.