The Cotton situation


Material Information

The Cotton situation
Physical Description:
v. : ; 27 cm.
United States -- Dept. of Agriculture. -- Economic Research Service
United States -- Agricultural Marketing Service
United States -- Bureau of Agricultural Economics
Economic Research Service, U. S. Dept. of Agriculture.
Place of Publication:
Washington, D.C.
five no. a year
bimonthly[ former may 1961-]
irregular[ former 1945/46-mar. 1961]
monthly[ former 1936-1944]
completely irregular


Subjects / Keywords:
Cotton trade -- Statistics -- Periodicals   ( lcsh )
Cotton trade -- Periodicals   ( lcsh )
federal government publication   ( marcgt )
statistics   ( marcgt )
periodical   ( marcgt )


Dates or Sequential Designation:
CS-1 (Nov. 1936) -
Dates or Sequential Designation:
Nov. 1936-Apr. 1975.
Dates or Sequential Designation:
Ceased publication in Apr. 1975.
Issuing Body:
Issued by: U.S. Bureau of Agricultural Economics, 1936-Oct. 1953; by: Agricultural Marketing Service, Nov. 1953-Mar. 1961; by: Dept. of Agriculture, Economic Research Service, May 1961-Apr. 1975.
Issuing Body:
Issues for 1936-Oct. 1953 published by the U. S. Bureau of Agricultural Economics; Nov. 1953-Mar. 1961 by the Agricultural Marketing Service; May 1961-Apr. 1975 by the Dept. of Agriculture, Economic Research Service.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 020142316
oclc - 01768374
lccn - 63045282
lcc - HD9070.1 .C78
System ID:

Related Items

Preceded by:
World cotton prospects
Preceded by:
World cotton prospects
Succeeded by:
Cotton and wool situation
Succeeded by:
Wool situation
Succeeded by:
Wool situation
Succeeded by:
Cotton and wool situation
Related Items:
Statistics on cotton and related data

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Full Text
*. i __ .-."

Bureau of Agricultural Econoirics =.TORY

CS-16 February 25, 1938



The world consumption of raw cotton, both actual and adjusted

for seasonal variation, appears to have shonm some decline

December and January largely because of reduced mill activity in a

number of European countries and in Japan, according to the Bureau

of Agricultural Economics. In the United States, cotton consumption

was about the same in January as in Dccer:ber. There was apparently

little if any significant increase in any important foreign cotton

consuming country in January over December, although in India cotton

consumption is reported to have continued at new high levels.

During the firPt 6 months of the current (1937-38) season,

5,085,000 bales of raw cotton was consumed in the United States. This

is at an annual rate of 6,170,CCO bales, or 22 percent less than the

7,950,000 bales consumed last reason. Furthermore, in December and

January the annual rate of domestic consumption was much less than the

average for the first half of the season. Although domereic mill

activity apparently increased somewh.-t during the first C :' r';s of

February, a further advarico is necessary if domestic consurmption for

the year ended July 31, 193R, is to .x~%scd C million b'les.

The annual rate of cotton rLill consumption in foreign countries

in the first 6 months of t'-i: st.ason w-:s Fsomcw.hrit les:~ than the actual

1936-37 foreign mill consumption of raw cotton. The rate during the


past few weeks has been materially less than the average during the

6 months, August to January, and much less thrn actual consumption

last season.

The supply situation h-s changed comparatively little during

the past 4 or 5 weeks. 'ihile the estimated 1937-38 foreign production

of commerrcial cotton has been reduced r.bout 350,CMO bales during this

period, this is equal to less than 1 percent of the estimated world

production. The recent passage of ths Agricultural Adjustment Act of

1938, however, indicates a somewhat greater reduction in the 1938

domestic acr-age than scemed likely under the earlier agricultural adjust-

mpnt act. While the 193,8 allotment under the new act tentatively

estimated at about 26,400,000 acres is not greatly less than the acreage

goals previously announced, it is gn.-*n'rally agreed that the 1938 domestic

acreage probably will be considerably smaller than would have been the

case without the new act.

Tho passage of the new act partly accounts for the substantial

advance in domestic cotton prices following'the first week of Fobruary.

This advance, which up to February 23 amounted to 3/4 cent per pound,

resulted in the average price of I.iiddling 7/9 inch cotton in the 10

designated markets reaching 9.:'4 cents r-er pound on February 23, the

highest daily average since last September.

- 2 -



Dgezstic -prices strong .rEi eC qcofnd ad third wrgeks of February

Domestic prices of Middling 7/3 inch cotton in the 10 designated
markets, after fluctuating between 8.45 ard 8.67 cents per round during the
4 weeks ended Febria.ry 5, advanced to 9.34 cents on February 23. This was
the highest daily average price for these markets since the latter part of
September but was 3.47 cents less than on February 23, 1937,

The recent passage of the Agricultural Adjustment Act of 1938 partly
accounted for the advance in prices during the second and third weeks of
February. Exerting pressure on the downside was the continued unfavorable
cotton textile situation both in the United States and in foreign countries.

LiVerpool prices: American cotton low in relation to foreign

The recent advance in domestic cotton prices was accompanied by some-
what similar gains in the price of American cotton at Liverpool. Although
the Liverpcol price of a number of foreign growths also increased somewhat
during the second ard third .-eeks .f February, the a-1,'tce v-As relatively
less than the increase in th-. nrice of American. As P. 'ult, the price of
American increased slightly relative to the price of foreign growths, but
remained more favorable for consumption of American than during any of the
past 4 years.

On February 18 the average price of three types of Indian (Oomra,
Broach, and Sind) averaged 85 percent of th? average price of American
Middling and Low Middling compared rith 85.7 p3rcnt for the month of
January and with approximately 80 percent for the 1935-36 and 1936-37
seasons. During the 5 yoars ended 1932-33 the price .f these foreign
growths averaged 76.9 percent of the price of American Middling and Low
Middling. The rice of Egyptian Uppers on February 1l was 25 percent higher
than the price of American Middling 7/8 inch, whercias during 1936-37 tppers
averaged only 19 percent above American Middling and in the 5 years ended
1932-33 averaged 17.6 percent above. (Fjr other comparisons, see table at
ehd of this report.)


UNITED STATES: Textile situation unfavorable despite r.air.t.'rance
of retail sales

The domestic cotton textile situation continued very iur-
ing January ard the first 3 'Reeks of February. On th. wholo, i:.anufacturer'
sales of ct;tton textiles apn'.irontly c:ntinuocd mat.rially elEow the restric-
ted output, despite th.-;a:t tia v-.iiuno ?f ordOrs bcoked during tnh
second week of January ax.d tVi- third week of Fjhrunry. Trade reports,
however, indicate that retail salmon of c.ttor. textiles are continuing much
above the reduced production cf ruehI goods and that s:.pplies in channels
of distribution are Lt*ing reduced r.aterially. This hns been a favornblo


factor in the situation. If it is true, as reported, that in a number of
localities stocks of cotton goods are now at low levels, any significant
improvement in the general business situation might result in a very material
increase in manufacturers' sales and output of cotton textiles. Without a
substantial increase in sales and production by manufacturers within the near
future, domestic mill consumption during the 12 months ended July 31, 1938
probably will not exceed 6 million bales and might easily total less than
this amount. Domestic consumption totaled 7,950,000 bales in 1936-37,
6,350,000 in 1935-36, and 5,360,000 bales in 1934-35.

During the first half of the current season (August 1 to January 31),
domestic mills consumed a total of 3,085,000 bales or at an annual rate of
6,170,000 tales. Consumption of American cotton totaled 3,004,000 bales
during this 6-month period which if equaled in the 6 months from February
through July would. give a total of 6 million bales for the 1937-38 season.
In January and the first 3 weeks of February, however, the annual rate of
domestic cotton consumption when adjusted for seasonal was materially below
the average for the first 6 months of the season.

In January the index of domestic cotton consumption adjusted for
seasonal variation was about the same as in December, as was actual consump-
tion. However, the weekly index of domestic cotton mill activity released
by the New York Times indicates that during the first 3 weeks of February
domestic cotton consumption adjusted for seasonal averaged somewhat higher
than in December and January, but much below the August-January average.

ETROPE:I Depressed situation result of number of factors

The European cotton textile situation continued depressed during
January and the first half of February. A reduced volume of new orders and
restricted mill activity were reported from a number of countries, including
the United Kingdom, France, Belgium, and the Danube area. Textile sales
and mill activity in Germany continued rather high, within the limits of the
improved raw material supply situation; much of this activity is based,
however, as in Italy, on substitute raw materials. In Italy, declining ex-
port demand is causing some apprehension.

The recession in the European cotton industries during recent months
is attributed to the general economic situation and other worldwide uncertain-i
ties. An improvement, or prospects for an improvement, in general business
conditions during the next few weeks would probably result in an immediate
favorable reaction upon the cotton industry.

United Kingdom.- During the second half of January and the first
part of February, unfavorable factors dominated the Lancashire cotton
situation. Cotton consumption has declined considerably as a result of a
recession in general business conditions and the smaller exports and ex-
port orders for cotton textiles. British mills were considerably less
active than in January and February last year.

j/ Based largely upon a report from the Office of the Agricultural Attache,
Berlin, lated February 3 and supplemented by cable on February 12.


- 4 -


Many l)ms were ctip'pe' by- shrink-~'e )f Irier lists. Fraip in-
quiry fr niecou-i's, esprci,.ll, fr),n r.1., I'aj--n-. sarewhat in J-xuiry
with firmer raw price; and les'senf. in~:trert in Japanne:-e -J.s, but in father
quarters stacks )f .;~ ?. b)u-: t it nich-r priZes werS an Iirodi-.ent t t new
business. S):e spinnin;: mill -. 'ere stepec. .urinr Jpnuarry, f)r p .:eek at a
tire, while there wr1-ed. ,n sh) rt-time La.-it; ni rirn rills 'f the
Lr:cashire C)ttan C-.'praptibn rere cl) .e.. d0.rir..; thl- last reek 3f the ronth.
Press reports state ..not in a r:>.ti::o.-;- l J 'ua.ry 31. spinners )f t-rpes
if yarns eareeC t) curta'il their nutrfut 50 percent '.urir.n Fe'l-ru-.ry tU aviid
further accuruiatio)n 3: yarn stocks.

Areric.?n c)tt)n cintifbled t> mdintain a rLlativelv fvnor-.ble p)jitiin
an the British market. Inm:rts if Aneric-an frn the first uf t.e: s.-.s)n t3
January 28 ':er- 52 n.rcnr.t higher a ear a.;), r-hile imp-rts If ST7ptien
were 23 percent lces, 3rrzili;rn 36 percent l.ess, en2 India-r. R :'.rcnt less,
Stacks of Americ-'n :ttmn in Britis: pirts )n Janut'r 2b '.r.' nr;iz'er'~ly
higher then -.t aazy time lurin-: the- nr..t years, whIle stlc'.. 3:' w -":tian,
Indian ard Bra:7ziiapn were lesC than a y-:-ar --.rlir. Tae ,icJCuru-.ti- n if part
stocks ) f cttn n in Gre t 3ri-ii s'iuL:'-. be fav)r-ble rt~ rc-Latively
large share of A-cri-on in t;-.1 -i.'. 2ns' .1.?1in. T'ere L-v ')Len ne c)n-
plaints, h)wev-.r, cn:-icrrin.-- th.o -' c it.- Kf Ac.ricr.n zttnr cxcessi"e
m'istur3 c)ntjnt -nd. it ir sr.i t,.that u:.. L' The iinurtcd 2ttin hp.a nt
yet been res)ld.

Gennany.- T.. r-w i:--.t:i-.t sup i'J- sit.ur.tin in the Germr.r. cittmn spinning
mills appears tU iL--v slw.i f lrt".:r irni.r),r.r.nt -'uri: : the put few wenks.
Retail sales )f c)tt)r textile, U.)w .vzr, .-ntin-.:c', hi ih, with .'Tventer V.'
21 percent -abve n- yrear .rlier '.d 5 percent t a')V: Nvaenler 1933, ther-fir,-
larguly 3ffret th- effects of the incre,:sed ra.w :mrteri,-.1 supply. From AurCst
throu- h Dec;mocr net im. prts )f ,1l nettn- spinnir- rTatrrials int.) Germany
totaled 36L,4,64,0,nC. p)unds c)-ipared withi nly 27,',9? ,00'D pur)ds in 1936,
335,5'40,000 pounds in 1935, 2Lh,20.,00.j p) in 1 a3, an: 34S,327,00C p)'un,.s
in 1933. But the pr)p)rti)n if rrv: c)ttfn in tital- imnprtc 'f cttttn, cittn3
waste and reclaim.e' citt)n ro'unt. t )nly 7"T p.-rc-nt c)ra :.'are. wit 92 peri.-rnt
in the Aurs,-t-Decmr.ber pcri)d of 1931.

Supplies n c ,l-v-) 1 :'lr) L.a'c .:re.-::tl comp' with last
year. German tin in 1."7 Vrs a.zut. 4,37a ,00C Ji n:.ds a.n, i- exTpete.
t3 be abjut 30%,6 4!,ol, t)nr in 13S.;

Czech) lzY:'..i'. in -nar.uf-icturers' sfln's n'. in ~i'l activity
continued. in Czech. s'-vi kia .uLri'L-- J-r.'1ry pn tI.- 'irs. ...,lf i F rr .ry. 3 -th
the decline in textiLt .:.xprt business- t'A the reces.iaT. : t.? ..: ic
situation within Czech, slvrkin .arc r-es'.-nsil. fir tl:- re.. ction in
thu v mf rd i.,rs jn "han. It is s~idc thalt t-L.._ nvre '.c'lin. i:- exptrt
sales if c1' v.-'s t t,'i UJiit.i: St-ites in tno l.-rt nu-'art -r if I'-17 is vieved
with much alarn. Altonst ;X0 perc.':it )f the pr ,.duti r.n >f "tt n I Vs has
hithert) been I'eperndent )n exm-)rtati n t) '.r,- Unite.i St:.t'*,.


- 0 -

Aust rin,- Declin..e in nurni usir.:-,E r." ,ilt activity h;ive continued
in Austri--. Betweent. th; er'nc) 3f flOct)r .'r..." the >.d )f, )ccupati)n in
the cttt)n industr-, is slid t3 have .-cline?. 1,0 rcrc:nt. 'he decline is
..ttributed in part t. the e-.i-rt difficulti.--s jFi.-" er.ciurntere..

A recent dernand Y the 3pinnin.-- ir-.:.t.r-r f)r an ir-lprt tariff on cell-
w))1 yarns seems t) su,-----t that the Austrli-n. -.ills pla.nnin:i t) mianu-
facture such y rns. This w')ul.A se..m quite likely in view )f Austria's
.iun':Jant w3)1 res)u.rces.

France.- in yarne a:'..1 c!)fti frem errL-;r J-nurv t. r.i.-,
remainned -uncertain in Fr-.nce and ..ill activity was re.ntrictJ.i.. PYiitical
urlcertainries a :. ed tJ t.; c.-.ti)n unf.>' r \.:.irc. bu'' rs re!l-r-.l-ly operated ,
thl -ah sta.i le )r even r,-.: c'tt)n qi1)ut:ti) r-, .j:ie f)r n) re confidence
in present -nlue.3. A r-*tlh -r "2-;.,ti;.fact:r- ir..ustrial sitlueti)r is reported
frnr Alsace.

Bel-iu..- 3.) rt-tir. v.- rl: in t.. B:-Lian , ,jills n-ntinued' in
Janu-.r/ an. the firc.t .l. :" F.-tr r-r', usinesr is .-c-rn-rally rep)rtec
t3 nav.-e remained nui.-t.

Italy /- Thrr .-'.')ut Dec:,L:-r .' n. January tie It-tii'i- c)ttan textile
inrustr.r appears t) ~ ?v -n: intai-e":. r-. .-rr..ti--ely hirh level )f activity.
Miills reached ne-C7 hi..if Lneve-ls 3f )ccup'-tion .-urin- r ctL Ler -and apparently
ab)ut maintained tr.n '.urin-i the t.r:-e f !1.1,in. m)nt!lr. The bulk of the
activity ap.:., tre.ade c)ntir ied t) L' ! )r. e.-p) rt rd.-:rs; production -fr--the
domestic nma.rket v,'.: n cJnfi;inedi within nr.rr.a: li-its rd forced the use of
cttt-n substitutes )f -rr--in. utility.

".Te utl3ok f.r :the imj.,rtntion )f c)ttjn, particularly Anerican,
appears >,nd f.r :the net fe-: m)nt:s, i f prices are n t. increased materially.
Th:e cotton industry f)r t'ie .nth i-.-u'e.i.-t.: l- ?jlCe-, nh)wevcr, appears un-
certr-in in vierv f ti.-' ,.c lining .)rt r<:.erE upin which manufacturers are S3
largely r.ependcnt. Fr s)rse time f;reir.n 'buyers have ?.Tpeared less eaper
t) plcce forward :, t:-.n tlhey. w- r liat sprinr and. carly summer.

ORIEN T: 3/ Situatiin Unfavrable xc:nt in Inrin R'c-nt reo)rts in:cic:te t -,t J-p':.nee r.:ill c)nsJ-upti)n if raw
c)tt3n declined c)nsier.blj l during Jrnunrv arc.. thl first tvrn weeks )f February.
Because )f inrre-.Jed prOd.iti.t n If c)tt.n a.nd staple-filer mixed yarn, activity.,.
in Japanese .-illc apparent: sh.v:e: cr p.r-..tivel" little chance. It is re-
parted that t'he :"t)r. Ind.utry C-ntiril Cr-n-;itte-- is purchasing all cittan
fr3m merchants nlK. 2.l1ttin, suppnli-s )f r:.r c)tt)n t) each mill, and that
merchants i- l_' .lncerdea1- directly it"; iniivi."Jai nilIs.

2j Based in part upn i;-z3rrati3n s nplidc. y the A.-'rian C.n.sulate,
Milan, Italy,
3/ Base.:1 largely a).r radiAt-r-cs fr. Aw-ri -ulturil Crm-iis:i.ner .'.UD?.Dws)n,
Sliianhai, under d..tes )f Ja2 nry 2S, Feru-,.ry 7, 12, 14 ar d 15, and frio
reports 3f the- 17e, Yark C)ttan Exchnn.e Service.


The jutput ?nr. '-iisFtrit ti'.n f ;.-r,. t .m rch- .tr, n,. well as th. t -pe
ff r.,.' nateiril. usci f)r yarn, is --1 ) rn.1 r) ".Le : '. C ttin In '.ustry
C) Co1:ittee. This c) .nit te* .en-ncC 't ".) .ti)". of uno.ixed
ctttjn yarns durin;- Fcorua.y must be li..-iti:d t3 20CQ,0'. b.les (af Q pr)
j30 pounds) an'1 th..t pr: ucti, 1f ctt .t'. t-ple-fi.>cr--i:xtre vrrnf must be
limited t r.ppr)xi mat'el>- OO bjul:s. I c.rIraris)r. ':itnr t:. total yr.rn
outputt far Jpnu-r:, :re rcied-.e' psr .ctirn fbr Fe:ra ry renre.ents an in-
crease if 5 percent. It is 'iun':rctn thia' t-?.r. t-.l rc:.L :.u-e pr)l:.u:tin f
yarn is eq-Aivalen-. t; 2g7,31 f'J i..s f urnmirel c)ttrn : -Prn whic:1 is 3::.1
2 percent less t.--n th estin-..t:. '1ut.-2 .f suc.h y.rr.. :-rr--- Jnu '.", ut 7
percer.t les- than rcen' u r. T]he oercent-.:e 3.ecline, in e-.e ecuivrlent un-ix-d
catt)n yr.rn prfcducti,)n, rpp -t-r:.ntly r presnts the -eclirne in
c)tt:n c)ns-.rpti-n. It is th:t unier the ,tb3v r --.l~tiU.. t) tal
c3tt)n rill cr.i'.ptinn in J-pnn furir.n January wvs 17 per-:'r.nt Ic-2l than the
aver-se fr t-. first half )f the :r-1rre:.t se -m.n.

Cat:t n clotL experts fr1n J ,-.. r;:r.. -I.intrin: t .: r. i-ly hi-h
level in t.Lsc firs 5 : nths f t:. -'rre: t .. -2-).. Th.ri:-- recent w-,:c.! ,n)we-:er,
they have apparentl-r sthrv-. l':rt ,ti.' -'.ec_ -i-. '. t.t:-r..i- ..- i r rs --re
believed t) be v.,,, s l 1. t.. r-. ir.ica i)'s t:..t sales Iurinr
recent w-ee'ks h-~.v. t Ier quite sr:?. .1-z .-.L,:ss is re :uAtr -.ti-.l. increase
in the near future, e:-:p)rte ilL :.). v.v y eci.t.c .:cline Aurin: t-:e next
few months. It is rnpirte. th..t til, r c:nt incr.-?E:c- in c'tLun textile pric-s
are cr,.sin; gr-:at C)7.c-rn t the J-1r.. pC inz-alry, 1ince this is :.-nsidered as
being an inpTJrtant f ,.ct.r ir sle- ) t? -)-rk?':-, s l '.r.i,-,, t}h.. B st In.'.ies,
and Afirp.

The unr.f.v)r,..bte situ tin r.;onct t. t textile experts, ti, -tther ,7ith
the increasing pr)dacti3n if yearns c)nt,.ninin- 'ri'::? i)f staple fiber,
piint tr>ar' furtncr sirnificent decline in ctt)n mill cmn'-:u.;-ti)n in J3p-nr.
It h-vs bi.en sucre--ct ., l, w.-sv.r, )1jait 7- ,0"' rr in..'l--c r -I percent 3f
the 4 :-iliin i.: ti'.-r spin '.1t. s -. put int) perrtin in t-hir
present 1)catii n ir.cte-id f' th se ir ):t.--r Dini'-1.:s t) Tsin.-tn. Chir.%,
t. replace th)r, e d' v. ..; :r i it.-.v-; ..:ti'ity (se. d .i.r7:ip: tin 3 t.-i pr)-
p)sal in tihe f ill ir..0 sccti)r. p-rt.i- .ir. T) C.i i,' T i n'rb.-P sninile?
(750,000) in equal t, L;- () ; .: :: f t:h t -1 active spindles in
Japan as 3f July ,1-, .L,37, n -~rc .'- bl. if cn:s'-iin c-: :*rntial qiuntitics
)f citt)n. ShiulJ n'r.i r if pin .- 3:,-r-:*t .t c- *-'*- rir.- th?
remainder >f t.,e sc::, r L t. fill r,"- :-c v.'rimi, "i..:.t, \wit. .t this arrr-n.-ement
ba filled by nills l,.--tctd in C*hiZ.., it :.>ul-. mnatripl.,- affect tL:. ql-rntity 'f
cattin c)nsuimer. j --i' ill in J::,,'. n. An t:..r fpctjr v.'i.i!. .-' t:-. t nrev. nt
further suor.nt.nti-l -eclin- s in catt3n. )n .unntt i)r. u.:rii- '. .- r..-..t fi'.: na.ti s
is the R ..rp r._d.ltij n in !i.rth China tariff r.t 1r. ':,t'.n t< xtr: i ..ra--ht
about by tiL s,-:.-:.11. :.rr)visin. .-.vrrn,:.nt. ThereC-, rji:ttinns r'2..-inr frin
34 t 5%; Ks.nuld '- f ri-. benefit t) J-.'..n. se ex-r rt s if :i rt in
textiles t) C:inra.

CS-16 -

According to press reports, the establishment of a Torth China Raw
Cotton Comnany has been proposed. This company would have its head office at
Tientsin with branches in Osaka, Japan, and in leading towns in North China.
The company would be controlled by Japanese and should facilitate the exports
of Chinese cotton to Japan and should also be of some aid in the distribution
of Chinese cotton to Japanese-owned mills in China.

China, including Manchuria.- It is estimated that in the first part
of February cotton mill activity in China was slightly higher than a month
earlier and perhaps the highest for several months. In Shanghai cotton mills
apparently continued to operate at a little l-ss than 20 percent of last year's
activity, but the opening of some Japanes3-o'wned mills in Shanghai was ex-
pected to increase activity somewhat. The Japanese-owned mills are particular-
ly handicapped, however, by the labor situation and by restricted markets.
The Chinese and British-owned mills in Shangnai, which were estimated to be
operating about 41"i,000 spindles and at a rate about 27 percent as high as
last year, are spinning low count yarns almost exclusively. The Japanese-
owned mills, on the other hand, -mere spinning 201s to 60's count yarns which
require somewhat better qualities of raw cotton than that being used by the
Chinese and British-owned mills. Should these Japanese-owned mills, which in
the middle of February were estimated to be operating about 9 percent as high
as last year, continue at this level or expand their operations, a small
demand for Amerir.nn cotton or cotton of somewhat similar quality may be ex-

In Tientsin, where mill activity in early January was estimated to
have been nearly 40 percent as high as last year, operation in early February
was estimated to have increased to nearly 90 percent of a year earlier. In
Hankow, mill activity apparently continued about the same as a month earlier
but somewhat below last year. In Manchuria, including Kwantung leased
territory, activity .ns about the sa-e as a year ago, whereas in other parts
of China not previously mentioned, mills were estimated to have been running
at a rate about one-eighth as high as in the early part of 1937. For China,
as a whole, includin-. 'M.anchuria, activity in early February was estimated at
about one-fourth as high as a year earlier and activity in all mills outside
of Shanghai at about 32 percent of a year earlier.

It is reported that 11 cotton mills were destroyed in the occupation
of Tsingtao by Japanese troops, total damage being estimated at 200,000,000
yen. Press reports indicate that the Japanese owners of these mills have
petitioned the Japanese Government for their restoration. It has been suggest-
ed that new looms and spindles be purchasc-d, or part of the 4 million idle
spindles in Japan be sent to Tsingtao to replace those destroyed. Another
suggestion includes a proposal which would enable Jrapanese mills to operate
about 750,000 spindles of the large number of inactive spindles in their
present location in Japan, instead of sending these or new spindles to

India.- Mill consumption of raw cotton in Indie. during the first 5
months of the current season was substantially (about 6 percent) higher than
in any like period in history and exceeded that of August through December
1936-37 by 17 percent. In December and January Indian mills also continued at


- a -

or very near record levels. The exranzio-i of mill consum-rtion in India during
recent years has been to a considerable extent at the expense of cotton tex-
tile imports from England ani Japan. The current hiiih level of consumption
at a time when cotton mill activity in most other countries has been declining
perhaps ray be attributed larg-ely to the Japa.nese situation.


19j37-3 world production and supzplD1 *1 i :htl.1 reduced

Recent reports from Brazil and India have resulted in a reduction of
340,000 equivalent bales of 478 pounds in the estimate cof the l3j7-38 foreign
and world production of cor.uercial cotton, acto'dia;- to reports of the Ne-7
York Cotton Exchange Service. This revision in the estimate of production in
foreign countries resulte'i from a reduction in the estimated production of
commercial cotton in I-'.ia front 5,500,Cjr',0 Lales to 5,360,000 bales and a re-
duction in the estin.te of the Brazilian corn.-erial crop from 2,100,O00 to
1,900,000 bales. These changes reduce.l t:e estimated total foreign -roiucticn
for the current season to 18,710,0'Y)0 b:-les nt the 7orld com-icrcial crop to
37,010,000 bales. The revisio: in the estimnat' of forcig reduction reduces
the world supply of forei,-n cotton froi 26,12G,000 1 bales to 25,78g8,00 bales
and the norld supply of all cotton fro-i r 0,6 ,3,000 to 503,.3,000 bales. These
revisions reduce the estimates of total worldi -olucticn nine-tenths of 1
percent and the world s-m,ly of .ll cottc.n about sevcn-tcnths of 1 percent.

198 domestic acreage jllotner.t tentati-:el-,- 26.4noot I,1es

Under the provisions of the A,;riclt'url AdjustuenT. Act of 1938 the
Secretary of Agriculture is diirectel to detcrmiine a national cotton acreare
allotment which is to be '.ivilcd arong the cotton-iro iwin:-c- States on the basis
of the production in each State ivr'in.- the .r..:cetin:- 5 years, tnkin- into
account the acres divert:- from cotton. T.:io allotment in terms of ocres for
1938 has been tentatively cstinatoed at 26 3,40c10,c ,-, acre.. With a verage- yiells
for the past 5 years, the national production allotment would be about
10,750,000 bales of 500 pounds gross .-ight.

Should the actual production be ,quival;-nt to t:-e national allotment,
the 1933 domestic crop would be ;- illio:n tb:le ls "1 'tan the
estimate of the- 1937 production. On th1i b:x.-ii of -rosc.-ts with
respect to world consumption of American -otrton in the 19-'7-3S -:a1-rn, .:.
a domestic crol., ho.'o:ver, ".7ul-l -robablv r. uv.iw. ir. a d.-'clin. of 2 million bales
and lbsc than S pTr-. r.t in he world su"pl:., o:' Anitriran cotton i.. i$' -- 39 as
compared with the r:u.,rly for t!.e i-'rrcnt c-.Zncn.

This year's l.lan .rovii.::- for t.,lOS,0).. a.-r.-s to b.- sown to :otton which
is slightly less than -T.rovi lc I l'-.t y.onr (r ,1iO," arer :), The actual acreage
sown in 1937 is not d'.'firi.,ly Lm;-..n, cut ':-*r.-.:p not a!iffer rrtntl:.r from
that provided for by thj;l 1':37 Tlan. Pr-.,t.ically all of the -otto a-crec:,ce fall-


- 10 -

to the share of collectives, the 1938 plan providing for a total of 4,893,00o
acres to be sown by them this spring, and. 19,,lJO acres to be sorn by the
Soviet Farms, leaving the balance of 24,700 acres to the share of individual
reasan ts.

Increased attention is at present being paid to the cultivation of
alfalfa in the -otton' regions. In vie-. of the planned. expansion under alfalfa
it is reported that new areas -ill have to be brought into crop rotation if
the above-nentioned planner fic-are of .,108,000 acres for cotton is to be
executed. No further inercaso in the cotton yiell per acre is apparently
envisaged for 193C by, the ,-lan.

An early Jani.uAr;, report from Usbekistan, the chief cotton producing area
of Mildle Asi-., in:licatei prrearations for the appro.)ching spring campaign
which h sets in vcry early there) to be v:ry deficient. By the beginning of
January only 1I.3 percent of all tractors in need of overhauling had been re-
paired, whereby -ab._ut one-fourth of the total number of Machine Tractor
Stations of tie ER--ublic had not yet started repairs at all. Winter work
necessary to ens.,re hii'i ;riells has not been carried. out to the extent pro-
vided for by the plan. FT.rthernore, sr5ip-Ment of artificial fertilizers has
not been adequate.

Up to January 25, procurings fr. n the 1937-3i crop were reported as
11,424 bales of unginned cotton equivalent to 3,541 bales of 478 pounds of
lint, assunin_ lint represented an average of percent. The reported pro-
----eurings to January 25 this year represented an increase of 4 percent or about
120 bales of lint over those of a year earlier.

CS-16 -
Cotton, specified grow ths, price per pound st Li erpool, sTecified periods
': Am-r.c. r an. : I .di d _1n
Year : id- : Low :Amri-: : 0otra : : Average .f Broach,
and :dling : can : : :Prcent-: : 0cTra a:,d Sind
month : 7/8 :dling :& Low :Proch:Actual of : Sind : :Percentare of
: inch :7/8 : 'id. : : :.kArican: :Actual:Amer. "ii'. &
:_ inch : : : : d. : : : Low ;id.__
5-yr. av. : Cents C ents Cents Cents Cants Perce.t C-nts Cents F:rcc- t

1928-29 to:
1932-33 ..: 13.49 12.63 13.06 10.P8 10.30 76.4 8.93

1934-35 ..: 14.24 13.49 13.86 11.52 10.78 75.8 7.7F
1935-36 ..: 13.50 12.58 13.04 11.23 10.78 79.9 9.05
1936-37 ..: 14.62 13.16 13.39 11.75 10.87 74.4 10.

10 .01

10. r 2



Aug. ....: 12.21 10.67 11.44 10.38 9.51 77.9 0.49 9.79 85.7
Sept. ..: 11.06 9.;1 10.29 9.22 3.46 76.5 8.54 8.74 85.1
Oct. ....: 9.99 .44 9.22 7.99 7.74 77.5 7.78 7.24 85.2
Nov. ....: 9.56 7.2 8.7 7.31 7.68 80.3 7.7.? 7.73 87.9
Dec. ....: 9.95 8.39 .!7 8.C6 7.n3 70.7 8.08 8.02 87..
Jan .... : 1.20 8.71 0.50 8.33 3.06 73.3 8.06 8.15 RF.7
Feb. 4 ..: in.3 3.73 9.52 6.46 8.r; 71.3 8.04 8.19 80.0
11 ..: 1.50 8.93 9.72 C 8.2? 79.0 8.20 3.39 86.3
18 ..: _.81 9.24 10..'2 8.34 8.44 7 .1 8.27 3.52 85.0
SEgtian : Brt iililn : Peruvian
: Sakellaridis F.GF.: Up: rs F.G. .: $o auln : Tanr.uis
S: :P-rcrct .e: :Perccnt'-l. : :ireci ; 3c : :Perce:tage
:Actual:n- AL.-r :Act:-l: of A-cr. :Actal: of A:-..r. :Actual: -f Amer.
S___..i :. :ld. : i1. : : :id.
5-yr. av. : Cents Purc nt Cents P--rcnt Cci-ts 'orce-nt Cnts Percent
1928-29 to:
1932-33 ..: 21.43 15..9 15.80 117.0 13.09 9'. 16.01) 118.7

1934-35 ..: 17.49
1935-36 ..: 18.99
1936-37 ..: 22.19
1937-38 :

izr .8
14 f

1 .419

111 .8
119 .)



1 .16

116. C

Aug. ....: 19.14 15'., 17.2f5 12. 11.79 96.6 15.74 123.d
Sept. ...: 18.12 1. 110 13. 1O .3 -. 4.57 171.7
Oct. ....: 17.12 172.4 l..r,3 lr.4 9.S5 31.. 13. 4 1- .5
Nov. ....: 17.17 17'. 1.57 131.6 ".5 1. 13.03 14:'.3
Dec. ....: 16.36 160.4 12.70 12r.6 9.95 1 14.20 142.7
Janl. ....: 17.52 170.3 1 3.1 12u.7 1 .29 :1 .0 1,.46 14-n .
Fob.4 ...: 17.33 IN.7 12.03 13.5, 1. 0.
11 ...: 17.30 1 1.3 12.27 L.. 10 i....
18 ...: 17.7 1,5.:; 1J.47 l : 1.. 1 i ___
Computed from rr:prts tlh Liv',ro l C tteo, AS:-;.i t i n. F. .o:-'i r-..::'.f. s (so af n
beginning AU,. 1) L'is, .:, iil: .-r*.'r.s w ich r,' I' r':.- Ld:' rr cL oj.
When Friday was a h:ol .:o'i- t r i is f'.r til :-:* rded .:.:: lu.;s 1 :' d:.'" .v('n. ls. .i
Prices were con-'trt.1d V'r -, n..-:: o (c.-t.s t c..r r tr'2. ... '1. t.,'s ,' ex 'h::.- as
reprrtud by ti-o F'. :r'.1 s.o ',: ],r.,.
(This table hrj.-in to date t ho trAtble n p ,-.L r, 1', jr" ., 1'.-& C 1toi Outi U.ok
Chinrt o .k) .


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