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Jaime Malaga, Ph.D.
Center for North American Studies
Texas Tech University - Department of Agricultural & Applied Economics
Recent Trends in U.S. Cotton and Sorghum Exports and their Impact on the South
Outline
Cotton Price and Exports
Cotton in the South
Cotton Trends and Expectations
Sorghum Price and Exports
Sorghum in the South
Sorghum Trends and Expectations
General Remarks
Cotton Price A Index (Monthly)
0
20
40
60
80
100
120
140
160
'Aug-09 'Oct-09 'Dec-09 'Feb-10 'Apr-10 'Jun-10 'Aug-10 'Oct-10 'Dec-10
Cents/lb
World Cotton Production and Mill Use
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
2000/01 2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15 2016/17 2018/19 2020/21
000 bales
ProductionMill Use
Source: CERI
World Cotton Imports
EU19%
ROW45%
Bangladesh4%
China3%
Indonesia
10%
Pakistan2%
Turkey15%
Vietnam2%
ROW26%
EU2%
Bangladesh10%
China41%
Indonesia5%
Pakistan
4%Turkey
8%
Vietnam4%
2000-01 2010-11
World Cotton Exports
2000-01 2010-11
Uzbekistan14%
U.S.27%
WAC8%Brazil
1% Australia15%
ROW35%
India13%
ROW17%
Australia
7%
Brazil5%
WAC5%
U.S.43%
Uzbekistan10%
Cotton China
0
10,000
20,000
30,000
40,000
50,000
60,000
2000/01 2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15 2016/17 2018/19 2020/21
000 bales
Ending Stocks Production Mill Use Imports
Source: CERI
Cotton Mexico
Source: CERI
0
1,000
2,000
3,000
2000/01 2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15 2016/17 2018/19 2020/21
000 bales
Ending Stocks Production Mill Use Imports
Factors Affecting Cotton MarketsTable 1 Description of the Variables Used in the Analyses
- Changes in US cotton production
- India cotton export restrictions
- Pakistan flooding
- China Textile Industry Quick recovery
- Exchange rates
- Depletion of cotton stocks
- Inflation in China
US Cotton Production by RegionTable 1 Description of the Variables Used in the Analyses
0
5000
10000
15000
20000
25000
2003/4 2004/5 2005/6 2006/7 2007/8 2008/9
Southeast Mid-South Southwest Other
Southwest (TX)
Mid-South (MS, AR, LA, TN)
Other
Southeast (GA, NC, AL)
US Cotton Forecast?Table 1 Description of the Variables Used in the Analyses
0
5,000
10,000
15,000
20,000
25,000
2000/01 2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15 2016/17 2018/19 2020/21
000 bales
Production Mill Use Exports
US Sorghum (Prices) 2006-2010Table 1 Description of the Variables Used in the Analyses
Sorghum PriceGulf Port LA
US Sorghum Production and Exports
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2000/01 2002/03 2004/05 2006/07 2008/09 2010/11
000 MT
Production Exports
World Sorghum Exports 2006-2010Table 1 Description of the Variables Used in the Analyses
US
Argentina
75%
65%
World Sorghum Imports 2006-2010Table 1 Description of the Variables Used in the Analyses
E.U.
Mexico 41%
Japan
US Sorghum by RegionTable 1 Description of the Variables Used in the Analyses
Southern States
Total US
Factors Affecting Sorghum Export Markets
- US total production and exports declining (long term) Ethanol use increasing
- Most of US exports going to Mexico (Chicken industry)
- Some unexpected demand (EU) may affect flows and prices
- Growing competition from Argentina and Australia
- Potential new markets in Sub Saharan Africa and LA (Colombia, Chile, Ecuador)
Final Remarks
- Cotton-Record high prices will go down and stabilize next year-US exports 75% of its cotton and exports will continue to grow -Southern States account for 90% of US exports-Relative prices of other commodities will be key variables. -Factors to watch: China mill use, Exchange rates, Energy prices, Indian,
Australian and Brazilian exports, WTO Doha round?
- Sorghum -Erratic prices will tend to stabilize and decline-US exports 40% of its sorghum but exports may decrease-Southern States (mainly TX) account for 40-45% of US production-Factors to watch: Mexican chicken industry, competition from Argentina and
Australia, New emerging markets, ethanol industry demand.