Economic Research Service (ERS) published cotton & wool yearbook summary. The summary approved by the World Agricultural Outlook Board.

World cotton ending stocks for 2005/06 (August/July marketing year) are forecast at nearly 50.2 million bales, 600,000 bales below a year earlier and nearly 2 million bales below 2001/02's record of 52.1 million.

The estimated reduction this season is attributable to the continued growth in global consumption and the reduction in world production from 2004/05's record crop. Foreign cotton stocks are also expected to decline in 2005/06, with reductions in a number of countries, including China. In contrast, stocks in the United States are forecast to rise 1 million bales in 2005/06 and are expected to be at their highest since 2001/02.

Global cotton production in 2005/06 is projected at 111.7 million bales, 7 percent below last season's record output of 120.4 million. Production is forecast lower in most of the major-producing countries, including China (4.5 million bales lower), Pakistan (1.8 million), and Brazil (1.2 million). These three countries are forecast to account for over 85 percent of the output reduction in 2005/06.

Meanwhile, India and the United States are expected to produce crops similar in size to those of 2004/05. Total foreign cotton production in 2005/06 is estimated at nearly 88.6 million bales, or about 9 percent below last season.

World consumption of cotton is forecast ata record 114.4 million bales, 5 percent above last season. Foreign cotton consumption is expected to reach a high of 108.4 million bales, while U.S. mill use declines further. Foreign mill use is expected to rise for the seventh consecutive season.

Among foreign consumers, the largest gains are anticipated in China (4 million bales higher), India (1.8 million), and Pakistan (1 million). China is expected to account for 70 percent of the 2005/06 global consumption increase and, at 42.5 million bales, China’s share of world cotton consumption will surpass 37 percent.

Foreign exports are projected to rise 20 percent to 24.6 million bales, or 60 percent of global trade in 2005/06. Foreign imports are forecast at nearly 41.4 million bales, 26 percent above a year earlier.

US cotton production in 2005/06 is projected at 23.2 million bales, slightly below the 2004/05 record of approximately 23.3 million. This season's near-record crop is the result of very good growing conditions and an increase in area of nearly 4 percent.

U.S. cotton exports in 2005/06 are projected to reach a remarkable 16.2 million bales, 1.8 million above 2004/05 and a record. With record foreign cotton imports expected this season, the United States-with back-to-back 23-million-bale crops-has large exportable supplies of cotton again this season to help supply the foreign import demand associated with rising global cotton consumption.

Despite the expectation of record shipments, the US share of global trade is forecast to decline slightly to below 40 percent, similar to the 2002/03 level. US cotton mill consumption is forecast at only 6 million bales in 2005/06, 500,000 bales below the previous sea son and the lowest since 1984/85.

Washington (DC) based The Economic Research Service (ERS) is the main source of economic information and research from the US Department of Agriculture. The organization with approximately 450 employees, the mission of ERS is to inform and enhance public and private decisionmaking on economic and policy issues related to agriculture, food, natural resources, and rural development.
 
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