world cotton market: trends in supply and use the multilateral trading system: a u.s.-africa...
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World Cotton Market: Trends in Supply and Use
The Multilateral Trading System: a
U.S.-Africa Dialogue on
Cotton
July 20, 2009
0
5
10
15
20
25
30
50/51 65/66 80/81 95/96
Production Mill Use
Million tonsWorld Cotton
WORLD COTTON YIELDS
400
500
600
700
800
80/81 86/87 92/93 98/99 04/05
Kilograms per Hectare
580
780
18
21
23
26
28
99/00 01/02 03/04 05/06 07/08 09/10
Million tons
World Cotton
Production
Mill Use
1 2
3
Production
0
2
4
6
8
China IndiaUS Pak. BrazilUzbek.
CFATurkey
07/08 08/09 09/10
Million tons
Three Crises Affecting the World Cotton Market
1. Global Commodity Price Crisis
2. Cotton Futures Market Crisis
3. Global Financial and Economic Crisis
August 2006 = 100
50
100
150
200
Oct-06 Oct-07 Oct-08
Crude Oil Prices
0
200
400
600
800
Oct-06 Oct-07 Oct-08
Fertilizer PricesAugust 2006 = 100
60
120
180
240
300
360
Aug 06 Aug 07 Aug 08
Commodity PricesPrice index: August 2006 = 100
Rice
Corn
Soybean
Cotton
WheatSugar
40
60
80
100
Jan-06 Sep-06 May-07 Jan-08 Oct-08
A Index
Nearby Cotton Futures
Commodity Futures Prices and A Index
US cents/lb
-10%
-5%
0%
5%
10%
1999 2001 2003 2005 2007 2009
-15%
-10%
-5%
0%
5%
10%
15%
99/00 01/02 03/04 05/06 07/08 09/10
World Cotton Mill Use
Growth in World GDP
Major Challenges
1. Financial Stress
2. Sustainability
3. Demand Enhancement
4. Distortions
0
500
1,000
1,500
2,000
2,500
3,000
1950 1965 1980 1995
2008 $ per HectareAverage Cotton Revenue
35
50
65
80
95
78/79 84/85 90/91 96/97 02/03 08/09
Season-Average Cotlook A Index
US cents/lb
73
6156
PESTICIDE USE ON COTTON
5
8
11
14
1988 1991 1994 1997 2000 2003 2006
Percent of World Pesticide Sales
35.8
30
40
50
60
70
1965 1975 1985 1995 2005
Percent
Cotton’s Share of World Textile Fiber Use
DIRECT ASSISTANCE TO PRODUCTION: WORLD
0
2
4
6
8
97/98 00/01 03/04 06/07
Billion $
DIRECT GOVERNMENT ASSISTANCE TO COTTON
0
1
2
3
Sp. Gr. USAColo.Mex.Turk.ChinaBraz.India
07/08 08/09
$/Lb.
DIRECT GOVERNMENT ASSISTANCE TO COTTON
0
1
2
3
Sp. Gr. USAColo.Mex.Turk.ChinaBraz.India
07/08 08/09
$ Billions
18
23
28
99/00 04/05 09/10 14/15 19/20
Million tons
World Cotton
Production Mill Use