The Cotton situation

MISSING IMAGE

Material Information

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

Subjects

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

Notes

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
Classification:
lcc - HD9070.1 .C78
System ID:
AA00013000:00009

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


This item is only available as the following downloads:


Full Text
,, : ,[ .- --. __ V


UNITED STATES DEPAPTI.ENT OF AGRICULTURE
Bureaau of Agricultural Econcmics
Watching ton

CS-17 March 26 1938.

THE COTTON S I T AT I N


Summary

A somewhat more than normal decline in the world mill consumption cf raw

cotton occurred between Jaiuary and February according to reports pertaining to

cotton mill activity in most of the important ortton manufacturing countries of

the world. Despite the curtailed rate of output, the Bureau cf Agricultural

Economics poirted out, manufacturers' sales of cotton textiles appear to have

continued belcw production in most countries, a situation which has been re-

ported almost continuously each r.cnth since last fall. This situation apparent-
ly has reflected partly a reduction in unfilled orders, and partly an accumulation

of inventories.

In the United States, cotton mill activity, when adjusted for seasonal,

showed comparatively little change in February and early IParch Fs ccipared withthe

restricted rate existing in January. In Great Britain some mills closed down

completely for 2 weeks in Februery, yet this is said to have brought little

improvement in the yarn supply situation. With the exception r f Italy and

SGermany, the reduced sales during recent months have resulted in further cur-

tailment of cotton consumption in. most countries on the Continent cf Europe, and

also in Japan. Scme improvement in cotton manufacturers' sales and output has

recently occurred in China but mill activity is still probably only about one-

fourth as high as a year ago. In India cotton mills apparently continued to

run at or very near record levels.

Domestic cotton prices advanced about three-fourths of a cent per pound

during February, but practically all of this advance was lost between March 2








CS-17 2 -

and March 18. A slight advPnce occurred after March 18, bringing domestic

prices about 1 cent per pound above the low point of last November. Develop-

ments in the supply situation appar-ntly caused cotton prices to advance during

February, whereas the subsequent decline was due at least in part to disturbed

political conditions in Europe and perhaps in part to the continued unfavorable

trend in cotton consumption.

The recent referendum r with respect tc marketing quotas indicates that

a very large r.aLjority of the dcmt1tic cotton farmer will cooperate in the 1938

cotton adjustment program i .nd suggests that the actual .creage may nob differ

greatly from the naticnal .crelg.a allcmcernts of about 26,300,000 acres. This

acreage, with yields equal to th. a,.r:ra-e for either the past 5 or 10 years,

would give a 1933 dcr.::stic crop 7-.'.."4 to 8-1./4 million balt.s less than the

18,900,000 bals harvested during, th- curr.:r.t season.

In viev cf the mark-d rtoductic.n in ori'-es received for the current

crop in most foreign countries sna the accumulation of unsold cotton in the

hands of producers in some countries, particularly China, it is expected that

the 1938-39 foreign acrewgie and production may be somewhat less than in the

current season. It seems quite likely, therefore, that unless yields per acre

are very exceptional, the 1938-39 world production will be materially less than

the record crop of 1937-38. In -eiew of the current world consumption prospects,

however, it is quite possible that the world carry-over on August 1 will be suf-

ficiently above a year earlier to offset the reduced world production.







;S-17 ,* 3 -

PPIJFS

Advance in February followed by e -'int irn .r'

Despite furtl er aelines in cotton mill activity in foreign countries
ard comparatively little chb.:ge in the ilem.ediate dcn.stic cotton textile sit-
uation, domestic cotton prices advanced about three-fcur+hs of a cent per pound
during February. Ir,.m Msrch 2 to Tare 1o, however, practically all cf this
advance was lost. Cn the Irlttor date _."itjlin, 7/8 inch cotton in the 10
designated markets averaged -tout 8- cents nri:lh was about the same as in
January and earl-y Februar,, but still nea-rl' 1 cent per pound above the low
point cf last November. PF.v-enn .Mar': 18 ar.d I-arch 23 prices .trenth-ned
slightly but varied within a range of less than on -frurth cent.

Th: strength displayed by domestic cotton prices during February ap-
parently i.ps du; larrcly to passa.;. of the "I' Farm a.ct This is accounted
fcr by the fact that the Act set the domestic production cgoal both for 1938
rtd 1939 at bet,-:en 10 and 1 million balers ari- also radu-ied tY-. pocsiiilities
of the Governr.ent Icen ste c's being m,,rkucted I.fore August 1, 1 39, and even
after that di.te by cc -.iarut ivly small amcun+s. The decline in cotton
pri-es f'cllo,,inG M-Irc:' 2 wv'Y. no dcubt due in -irt to the iLturbed political
conditions. in Eurcpe, altl.c-h reports with respect ti cotton textile s.les
..nd cutLpu- continued :misty unti-r-rable.

In relation cto .ost foreign growths Americazn cotton tric:s at Liver-
pcol ccnt4nnue.d lore f-ivcrabl-, to the consumption of mnerican cotton than for
any substantial pericd of months s.inc- 192-72,



EXPORTS

During t'-e first 7 months of the :urrcrt season, August to February,
tctal exports rC Amr-rican co--ton amounted to 4,.30,,000 r:rnir.g b-les, accord-
ing to data r ci;.sed .,- cle "urcau of the Cor.s-.:. This w.s an increase cf
300,000 bales or 8 p -rcent over exports in the ccrre.-ron'-ning, p .-ri-d a year
earlier, but s 26 F-reent lEss than tne av, r-g for the like p-riod in the
10 years cnded 193?-33. From August 1 up to tl-e end of --iaary, domestic
' exports were -bout 12 percent above a year e rlier as were exports d.-ri:g the
month of Janua'ry. -arinc F, bruarr,, hcoweve-r, sports drcF-ed to 18 p,-r-:nt
below February- 1937 and 3S p.rc.-.r:t below the 10-year vr.gr- -:- for tie t!onth.
In the first P.2 day.v cf March tc.tal ship ,:cnt' to foreign countries were 17
percent less than a yea-r ec.riier, according to unofficial d .ta, and brought
the tctr 1 frcr ugurt 1 through tlarch 22 to crnly 7 percent ..be-.- the cor-
responding p.-riod in the prtlcoe.rng season.

'ith t:- 1937-33 d,-restic s'.pply of American cotter about ore-f'curth
larger th-an during the prccedin,g sXr.son, rnl Vi+h- prices 15 to 75 cents lower
than a lear c'.rlier, and with dor-stic mills -sing a much smaller amount, it
becomes evident that fcreirn demand for Auneric.:n cotton so far this season
has been much lower than most observers anticipated last summer and early fall,










General econairic and political conditions in foreign countries, of course, have
been more unfavorable than was expecte.. Eir business conditions in foreign
countries, especially the wr'olesale demand for cotton tcytiles, continued as
favorable as in 1936-37, dc-meestic exports so far this season undoubtedly would
have been much larger than the 4,230,000 bnles actually exported. This pro-
bably would heve been true despite any effect the Goverrnment's loan program
might have had on exports.

Cone of the most important factors depressing exports from the United
States (see table cn page 16 ) as well as exports from India, Egypt, and
Brazil has been the conflict between Japan -.nii China and the resulting re-
percussions on the economy of both nations. Partly because of Japan's
difficulty in obtaining foreign exchange with which to finance the purchases
cf import ccrnrodities, the Japanese exchange allocated for the purchase of raw
cotton has been v .ry greatly restricted. This, together with the unusually
large stocks of rawI cotton hand in Japan at the beginning of the season, the
unusually large takings during the first 6 or 7 months of last season, and the
Ee.iY sales of cotton textiles by Japanese mills, largely account for the much
/takings of An rican, Indi,.n, Egyptian, and Brazilian cotton than a year ago,
For the first 7 months, August t1.rough Februnry, eypcrtr of American cotton to
Japan were orly 31 percc-rt as laroe as a yoer earl! r a:1, in the 5, 6 and 7
r.onths ended December, J:.'uary and February, exports to Jeran from Brazil,
India and Egypt were 25, 21, and 26 percent, respeativcly, as large as in the
corresponding period last season. The Iclv level of cotton mill consumption
in China and the re:c-itinL large quantities of unus -e re-. cotctn in that
country have indirec. .:y d pressed the world demand f-r jr.eric- cotton and
most other grc.rths. wh il? apparently Japa.n has r t as y .t obtained very
much of this Chinese cotton for use in Japan, efforts are being made to
devise means of securing substantial quantities of this cotton with which
to meet current requirements and perhaps build up the currently greatly
depleted stocks.

Domestic exports to Japan for the 7 months endid February were 740,000
running bale.: less than a y3ar e.rli-r, but experts of rxericar cotton to all
other countries ccritined were a little more tnar a million bales or 37 per-
cent larger than frr a Augui.st to February last season, icst of the other
countries tlh-- ncr.-.lly t. ke ccnsiderc;ble quantities of -: -erican cotton in-
oreasEad the amounts for tle 7-menths p-riod. Dec ss cf the. continued unsat-
ij'sctory developments in the cotton tIxtile situation ir most fcrei-n countries
during the p.st several months, however, many of these countries have greatly
restricted their purches.o since the lu.tter prrt of 1937. In February
dern-rtic exports to five cf the six largest importers of Amcricen cotton
wvre frcm 8 to 60 percent less than in Febru:..r 1937.


CS-17


- 4 -







C3-17 5-

DElIAJ AlD CONSUMPTICN

UNITED.STATESi Gotton textile sale and output continue low

Sales of unfinished cotton textiles by domestic !ills w ere reported to
have exceeded the restricted output during the third and fourth weeks of
February, but in the first 3 weeks of March the unfinished co+ton cloth msrke.t
again became less active. Manufacturers' snles of fij.ished goods are reported
to have apparently bout equaled the greatly restricted output during Febru-ry
and the first 3 -":c-cks of Mlarcn.

Total demjrntic cotton consurption in February was the low'.st for the
month since 1921, amountin; to 426,000 running bales compared with 6,000
bales a year e:-rlier and with 51o,000 bales in February 1936. For the 7 months,
August through Fe'br.itr, mill con-ujpticnr totaled 3,513,0:'i bal.s, about
1 million bal.s 3r 22 percent less than a ye,.r earlcir an- about the same as
from August through Febru-ry 1935-36. With the eXccption of 1935-36, mill
consumption through February this season, however, 7.as the lItarzet for any
qorrespordirg period since 1929-30.

During February the index of United Sir.ten cotton con snumation, adjusted
for seasonal vurLtation, was 33 (iS23-25 a '00), about the same .as in Tanuary,
\ut 37 percent lass than a y3'ar c3rli'r, and 20 percent b .lo::. thie averag-e for
the first half of the season. Trade reports ir.dicate little change in activity
in March compared with Febriuary. It seems quits likely that inlssa business
conditions and retail sales of cotton textiles decline m-ch further, domestic
cotton nill e"- ivit:" will incireaos from the ciomparatively low levels before the
end of the season. A very subcrte .tinl increase from present levels is obviously
necessary, ho.rev.2r, if ccnpumptioi for the season is to equal the annual rate
of the first 7 toriths of the season which was about 6 million bales, a figure
approximately 25 percent bolo- actual consumption in 136-37.

Uargins between average price of raw cotton per pound and wholesale
price of unfinished cottor clo-h (17 constrictions) 1535-36 to date


SinJna iAug. Sept.: Oct. : Novr. Dec.' Jan.' Feb.: Liar. Apr.: May June July
:Cents Ceats Cent-s Cents Cents Ctnt s Cnt Cnts Cnts C. ts Cents Cents

1935-36t11.61 12.27 13.31 12.20 13.02 13.70 1).26 12.76 11.96 11.62 11.90 12.72
1936-37:13.72 14.03 14. 8 16.60 17.70 15.22 17.36 17.54 18.5 17.66 16.48 15.59
1937-38:15.14 14.38 13.56 12.79 11.6o 11.47 11.20

1935-36 1936-37 1937-38
Cents C eint s Cents
Week ending March 4 ............. 13.1 17.35 10.9
11 ............. 12.99 17.66 11.03
18 ............. 12.S3 17.-6 11.21










EUROPE: 1/ Current situation unfavorable in most countries

The first 7 months of the 1937-38 cotton season turned out less
favorable for the European cotton textile industry than was expected
at the beginning of the season. The industry, over most of Europe,
exTerienced a considerable decline in sales and activity, particularly
during the latter part of the period. AL hough total cotton consumption
during the first half of the season was irger than a year earlier, it
now appears that 1937-33 mill consuTLation of raw cotton in Europe may
fall short of the comparatively high consumption of 1936-37.

The rececsien in new sales in domestic and er-ort markets, followed
by a decline in will output, resulted from the adverse developments in
general economic conditions in the world at large. In countries such as
Germany and Italy these outride influences .ave not been felt to any great
extent as yet in the general operations of the cotton industry, but even
there the greatly e-randed expcort business has apparently started to
decline. Activity in the German and Italian cotton textile mills remains
rather favorable, alticcu-:h or a basis involving increasing substitution
of artificial fibers for raw cotton. The considerably larger takings of
raw cotton by Geriiny during the first half of the current season have
not prevented a further ,ecline in the sh1re of raw cotton in total German
consumption, si-nce th-.re has been, simultaneously, a considerable expansion
in the utilization of "cell-wool" by spinning mills.

Europe as a whole Epparertly consumed considerably more (estimated
by the New York Cotton E.change Service at 9 percent more) raw cotton
during the first h.;lf of 1937-38 than in the first half of the previous
season. Consumption during February and Lirch, however, appears to have
been much less than a y;ear earlier. Consumption of Am.erican cotton, as
a result of the improve-d competitive position, represented a considerably
larger proportion of the total than in the first half of 1936-37. While
February developments brought a sharp rise in cotton prices, the advance in
no-nar.erican cotton during the month was of an almost -qual amount, so that
the competitive position of American cotton at the end of the month had not
changed significantly compared with a month earlier, but American cotton
continued to be nuch cheaper in relation to competitive growths than it was
a year ago.

United Kingdom.- In the first 7 months of the current season a
recession from the high levels of 1936-37 was clearly evident in the British
cotton textile industry. Except for a relatively bright period in September
and October 1937, the tendency in manufacturers' salc-s and production was
downward during the period. It should be remembered, however, that 1936-37
was a very favorable s ason, during which mill consum:'tion of raw cotton

_/ Based largely upon a report prepared by Lloyd V. Steere, Agricultural
Attache, Berlin, Germany, dated March 7, 1938. Information on the United
Kingdom supplied by C. C. Taylor, Agricultural Attache, London.


CS-17


- 6 -









rose to hither levels tlan during any of the precedirn 7 years. Mill
consumption of r-ui, cotton in the first h=lf of 1957-38 was slightly
larger then yiear e:irli,:r, but in Fcbrusary was much lower than in 1957.
The number of0 workers employed in January mas the sr.iIllest for many years.

De-velopnrnts during -bitru-ry and early March for the most part
continued unfa'or..bl.'. cotton yarn soles have been very slow, for the
most part. In the A.irican s-ection, bu.yii of yarns in counts and
qualities not covered by the eIgaliz-d price agretemnts appears to have
b.--n b-:tt,-r than in most ot.h-r qualities, but most business was chiefly on
a h-,nd-to-mouth bsis. The stoppnage- of snindles in so.-:e mills during 2
vja..cks in E.bru-ry is said to have brought little improvrmcnt in the yarn
supply situation. MInufuictur-rs of piece goods found the offers from
India ener-.lly unacc-eptable. The home market, however, provided some
encourTagr t;': t.

Exports of both yarns a.nd piece-goods were e::c Jtionally small
during J-nu-ry .nd February. Ii e-ouods exports in F-bruary were 29
percent les. t.an a y. -r rlicr and the smallest since prior to 1900.
During the 7 mont is frcl A- i-'ust through F i :brury, experts of piece-goods
we're 10 percent l.;-s th-n 1st y:-:.r.

Cotton dcliv-ri-as to Britis.h mills from Augurt 1 to Fi'bru7ry 26
were approximately 1,695,C00 bales, as compe-red with 1,721,000 b'les of
470 pounds net lait y.- r. Despite a drop in the proportion of Aic-rican
cotton delivcrd during. the last fc- weeks of this n.-ricd, th-, latter
repr--sentcd 47 p .rc-nt of the total since Aug-st 1 -s compt---d with 43
percent during tht corrtsspondding 30 ,weeks of 1936-37. Stock" of American
cotton on F-.bruIar 25 w. re the highest in manJy years end, dea'-ite the
declining, imports, even hi-her than a month earlier. Stocks of Indian
increased s,_-.scn.ally curing J-nu ry and F--bruary, but on February- 25 wore
still bclo-. l:st year's level.

Ser:riny.- Offici-l d ,tn from the German cotton industry show
continued high mill activity throughout the first h-if of the current
season. Operations ".pp?r to have even been about equal to or slightly
higher than 1 and 2 years .--i rlier, German net imports of raw cotton, cotton
waste and rcclaimud cotton spinning material in the first half of 1937-58
showed a great increase comp.r-:d with a year -earlier. This, together '.ith
the availability of much more "cell-v;ool" for cotton spinning purposes,
incdict tes that the r-w materi-t l supplies have been consid-rably expanded
as compared with August-January 1936-37.

As time passes, it becomes incre singly a-parcnt that the raw
material problem of the GC'rrman cotton industry is undergoing a significant
change. For a long time, G- rmany was f-ced with a shortage of raw material,
arising from inability to -ay for foreign cotton. As a result of a large
domestic production of sta-.ic fiber, the increased use of cotton waste and
regenerated cotton, low.e*r 'otton prices, and incrLeas-d exchange allotments,
the situation has improved. Yet shortage still persists not an absolute
shortage as comrarc.d with nor-1.l supplies of raw material but a shortage
in relation to the. greatly increased consumer demand for t;-xtilesuhich has


- 7 -


CS-17









developed in th.; !pn:t 2 or 3 ye-u's. iThus, re-tail srles of textiles in
1037 (in vc.li.') in: t 15 p, re nt above those in 1936 and 50 percent above
1933, larS',.ly theL r sult of n n : ro-ed volume of 5oods sold. This
dov- iopment h:-s mfd'e c-a,- inr -.- of r' i ratrifal -upplies a matter of
treat urgency, si.,;: t '.: i -. 1 i.f..; te i.t-,il shortage, which still
persists in a lar"e niu'aLer of .-ctt'r t_'-ti- l aud textile products.

Gre'ter outri.t ..Lnd si nifica ntlyv l'rger ra. rmatcrial supplies --lso
have tb,in .- lquir to t?',: c-re of +t 3 reduction in G:rman y'.rn and cloth
imports, an, to provide for tI'.3 i.ncr-ea in -.xcorts of cotton tt.xtiles
durirf( th i f t irSt nont'`- of this c son as compared vitih the s.am-e priod
of 1i'6-7 .

Th.:' dei:e in :.,an of' raw cr-tton nnd its effect upon the
ecrmrosition oa a'. s i.-r in I-.t-;ria.s ':s-'-a b o th.: cotton mills is shown
by the fcllc".:in?- fii.r :





-- n-cc------- h- -..^^ o.-- ^Q---1-^,- -_(J~0
i' l' 'n 1, 1. i, IjC
"- 'l3 s 0o als r cind po unds pounds

Nt imports of '..ew cottonn ..: 2',0 06 142,0u-. t.75,260 200,850 270,394

Het imports cf col on ':s-., :
linters a1-. r ieC .-l' rate
cotton .................... 6,466 82,113 60,24 72,225 94,249

Utilization of "6.ll-4scol'I/: --- ,614 17,637 44,092 83,184

To-il .....................: 43,472 230,.812 3ic3,l144 317,167 4F2,827

: Percent Frcent Perent a Fercnt Percent

!let irr-orts of raw. cotton ..: 92 2 2 7 63 60

Net imports of cotton w'st,:,
lintcrs and reC-enerated
cotton ....................: .5 17 23 21

Utilizaticn of "cell-woosl" .: --- 5 14 19

1____ 1r0 100 100 100

1/ Estimated; roughly P8C perc-nt of drinestic production.











The larger imports of raw cotton by C'rrmany in the current c:'-ason
hive been facilitated by the ac-?line in ri'v cotton prices. Imports have
shown increases compared with last y and Brazil, as well as Egypt. The share of Unit d Stat -s cotton in the
August-L'Ucerber imports was 2hout 27 prcc-nt compared a.rith only 20 pe-rce nt
a :.ear earlier but with 78 percent in 1922. The higher imports this year
to some extent havc gone to r-plenish the greatly depleted stcc'ks, and it
is :ren likely that th-' authorities as in th .: cas. of other raw materials
such as grains have t-.gun to set aside cr-ergency reserves of spinning
material. BrPr:eun stocks of raw cotton on Februaryr 2R, 1938, were 258,000
. bales, comp-red with 19",000 a :,ar earlier and 227,000 bales 2 years
earlier.

Cze;i coslov-:ukin.- Follo.'r rng a good sr. son, the first half of 1937-38
has been 1i:c. favorable. Orders, deliveries and prnrouction of the cotton
mills declinu'd, imports of raw cotton were somewhat below a year e rrlier,
and prospects for the second half of the season are uncertain. The main
causes of t'h-esa adv.'rsF: dcv-elopments have been the r. cession in general
business conditions entailing reduced aor, stic demernd and stignation
in textile 'u:.ort sal'cs for l:-itr delivt ry.

Actu'jl foreign trade statistics for the latter part of 1937 -
rccording e a.orts of gcods sold earlier in the year show thi.t exports
of cotton y?.rns and sranut'Lcture s kept up fairly aell, running above the
corresponding months of the. prccding year. Sa'l':s have been smaller, however,
during the first 7 monts- of ti.e current season.

France.- 'Jhilc Fr.ench cotton spinning mill activity during most
of the first half of th. season was well above a year -urlir, weaving
mill activity was somewhat belov' the corresponding period last season. As
a result, yarn stocks in spinning mills increased considerably and at
the and of 1937 were the largest in more than 2 ytars. It should be noted,
however, that, at the same time, unfilled orders in spinning mills were
maintained at a level considerably above any of the past several yNars.
This .gain is contrary to the position in the weaving branch where, since
April 1937, unfilled orders have fallen cr.astically below a year earlier.
This divergence in the occupation of spinning and weaving mills is explained
in part by the pick-up in yarn exports during 1937, as compared with 1936.

Mill stocks of cotton fabrics have been above those of 1936-37
despite reduced mill activity. Exports of fabrics show-.d a decline as
compared with 1936.


CS-17


- 9 -










Vhil:- there wer unr:'a nsfnctry developr.iets in the French cotton
industry durir:-; the first hl'f f the current season, and numerous
co:mplair.tc made t:, the industry, stiff rosict-.ce v as shorr. to adverse
influe-ces and i ill actiIt;', op .i" ally in thl spirmin; mills, held
up relatively ll. Takin'- t? 1 .-al rhortor : r.':i'- r '7~ k of 40 hours
into cr.sider-tion, t.ihe ae -e f rill .-ctivity hIs bean fairl-, satis-
f,ctor,-. French ii. ports f rna\ c.jtto, in th- first half of 1937-33
were ol.-' those of the c,-rresp.rnain; porio' last se-ason t'lt .ar-or
than 2 years a,"c.

C in- the be"in'in- -f 1932, trad- reports pertaining; to the French
cotton t:.:tille i d-ar-tr-, for thv n'-. st part, have bcon unfavorable. Mill
activity :.pa-.r.tl; .-s ." natcri:.!- reduccI, yet manufacturers' sales
are r. crtec as hatl:-:-; bt n iol.: .'-.ut'ut in r.mot -"reks, with stocks in-
creasing andi unill].:i rders bein-! fur thr reduced.

cliiu.l.- Acordin-;: t' -. report oC the Association Bol.-o des
Filat.ters de Coton, t'.e l clinb in :-anral business. acti-ity has been
felt keenly 0;' th ';l:l':i.r c:.tt-in indu-itr Accr'.i.-.; t. the repon rt,
th- v:ca.n-nose and inc<:rt'i-.:t-. f r'-: c-tton prices um to the en'. of 1937
d..otr' to the oiffic.ultics .f t. c tt n industry. ',.ecre c.f cotton yarn
were r..th-.r cautioi".- ver ost f t ast f quarter c0 1937 and ea.1rly in
1933. Deliveries .'. old contracts l ..-".1 .o-n and Li filled orders de-
clined. As a result, st cks cf yarn isncreas..e and nill activity '-,as
curtailed' .

R.-ports tot t 'lNew York C.tt:'1 Exchalge Service indicate that,
thr- '.ughot most -f Jccnar,-, Foebruary, :-"! the fir.t half -*f I.arch,
nanufnacturers' sal s )f cotton textiles, .ier below the restricted pro-
duction.

Sitzerl-jr'.- The ii.rprov:;.,ont 'operienctd in the S-iiss cotton
textile industry follo.jin the ..levluati n of the franc in the fall of
1936 aen,.er in the first half of the 1937-33 cs-as:n. Mill occupation re-
rainl. rather hi-:ih u r. ol' orders from Aug.ust throu-h January, but new
business both dC.inictic an.' eoxprt rnms resuceo. in recent months and
aill acti-cty apparor.tly declined c .nsiderably frio: the latter part of
1937 to early arch. In view of this, it is ex-octed that cotton con-
svj-tion in the se". ni' half of the current season ; :r:y be considerably
lower than in tle first half.

P'Ilnd.- ITr-norts _*f ra- c .ttcn int:t P-l--! from August through
December 1937 rere "-uch 1lar-er th~n us.al., Sonc of this cotton nust
have -one iint refillin- 'epleted stocks, since cotton mill activity -
whilO above a year earlier showdr .- correspondin.- increase.


cs-17


- I ,10 -









Wl 'oolvith:;t.'-rdir, the incre set i:-poTrts of cotton, March press re-
ports fr.- r Poland n-. no.ircc the .. n'.r; t Ch. '.kov: near t"nr:.-- of a .now
factor:, f or the proiciction .f 'c.ll-wool". Pr,..'ser. c' city anolits to
11,023 pounn's '-,illy but pro.--; tio is to be increa-se, to 44,092 pu".:ds.
A plant 1:. been .pe ed near Lodz f.,r t ..r- rol-uction of lti.it.l. Rl..ots
also an'oln.ce -.fff.rts t .',-ar' i.r, i..i c c.ll cti:o: of us,- .at-ri.l for
production of re-,aneratoc. .- ttt.:n.

It-.. '- It-alitn: cotton mill tivlty seems to 'a-v, c .ntinu'.
lurin.; F.abru.ry; a:id )nrly '.I.r2h at the -f rt ro.c':. in r rev-io- .n
n-:.ths, but to a consi1dr-'i .-. extent is .*.ai r -r;tly c. in. i. t i:.-it i on the
er:cition j' oli' orders. Ar. apparer-t 1i-c of inter-n.t on ?.. parrt of buy-
ere, particdarlly cutei.dc of Italy, is causing '.uibt:- as to the npo-sbilit y
of kp"rpie.. prou'tion at the presMnt rate thr.-'-.-'-hout thro year. T'.i reces-
sion in foreign buyit,;- has bean attri citc3. i principally to the decline in
int rt'.rnati.:o.I. l tr'iLe. T :-i.3 dCiostic m-arki t seems to be :-.erstocko.-. ith
hi.-'h-pricei D. Js which rot-il irs are fin ..ln- difficult to sell. The out-
lo:-I. for t'L: cotton trade, t.h-reof r,-, sconn di sinctiy less promising '.nr.
in: nreco '.i x., i :1I-nti'is.

Itnly's i.rp-ortxtion 'f 761,C000 b-i."ls of 470 'i-'snns net of raw cotton
in 1937 'n ob..out 60 percent larger thi-'t urine t.-- -'r'cein ye"ar ar-.r
co; p .re. -', -ith i.orts of SG2,500 tons in 1934. Ir:ports .'rin; -,rler
yoarr norrn-.ly aver"-sed C76,000 to ,,400 bal. rc p- y:r.

T-e increased iirport-tti.n of cotton wac dae 3.r-L-1.- to the removal
o. sncti ns, ob' 1ich hatd 'opr 1- e : I-ti .l ; nort s an', therefore, p.-Jrtts
trini-- the greater part of 1936. T:i- revival in, r., .ti -nal tr-.l 0. iri-n.
the latter .art of 9l,9q .rn.i in the first half of 1937 incr-.ased the f. reign
d'-..an.i for Italian .; ,' or th, 3 : :.'P.lation :f the lira in October 1 .
gave It-. i- n no:i'.i-actur -rs r"-: exporters an )t.'.-,t. over th',ir c ij'' tit.rs
in f rei 'n markets, thus sti:.ulatin- th '-ti-'ittls of the Italian cotton
nills. Th}isc iicreas- in .-- ortrti-.n of cotton goods enabled the i:nustry
t- import nore cotton, alth o,.uh iTnports f .r domestic c.-nsJ-rmtion re.ninct
rigidly restrictcl..

Itali i raw cotton ii;portr, 193'-37

Sourc 19354 1 ic 36 1' 7


7 L
: 1,000 ".'.les 1, OC :c.1os 1, CC') b a.les
r0 t'g -i-_ .g_'

S'nit e.:. St to 1r : 311 to
h -, t ...... : ..7. 65 1
In.-ia ....... : l4G 32
razil ...... : ? 14
Other country is 1S 14


/ Informatin received fro,: the A:.icric-'. Consulate, :ilan.


OS-17


- 11 -






CS-17 1 -


The increase in It-' i,. ..t-.,n -- ', s cx-ojrts ir 1937 bror."ht a
Inr--c Xo n ?r.si n in salks '.. c t S. -'."u thI IJsC.t. irt, 1: rt: ."t customers
beil- Yug;orlvi. a 1nd Ruonanrin. '1; .. i1 i Italian ,-.-.crts r.f cotton
fabric. and .-t. r c .-. t..-' c r-.i" v3r, Ir.r. the nomt import-
art Ti.cr" bi. t-.c tal -, c ''. un ie., ",t, Ar-nt .:a, Turkey.

It-.li'v, ct n .... c rts, 1 3o C:. 1 37


S: Other
fear :Cotto ..rns : C tt .: to-ti'. s : r ';.f.a ct -cs : Tota.l
: .c I t :
:IA)C' tAO3s 0) a U L- iun I s-C 1.0010 '-oanls

1931 ... : 14, 57 53,190 5,6co 73, 6o7
37 .. : 6,oo6 9,c6 1,64 156,476



A tLi-tat i- e cr'l li.ti .'. jf .::ort l- ray c':tt,'i : oir. irto d'rnestic
c i.sunpt l .n in t-7:, t-t ..', it b.'t:- y. r.ra 1- an, 1. 7 ,o:t t 45, 00
l,-- E I' ll 73 .. L ds ]' cotto:- .er th- .s .Ctiliz i-cl i i o..'s shipped
to the colonies. Ii' t:3 c'l. s "-c '. c r.s u ti 1, for lt,.1
proper fe.l rJ: abcut 300, b 0 ':lo -.l ir. 103- to 271,700 bl.3s ir. 137.
'.i.'. I..cl r .. :. n t? 3 ..se o. th- -".ri ctto sub-
titut,: h '- ro u'ti-o -.r an x t S, t' : t I.o r '- nt of
V-}.i: are ct.an 1 fitor (or L "c.l-- i. "c-ttunizOd"


S U. S. R.- Th c C: i.i---r cf t.'' Li.;It I ui tr'- r.-con tly
stated that t e -D ic: c,.t.t t '::.t e i !'.st.r is to r ,cc 4,15 ,000,000
,-r. .f f'ni f r -c 1, 3 ,00 ,.:0 ds ..f yarr in 1 3 '. Since
the total 1937 o-.It-jut f "ir, l.h .: "- br c '-ip-rr' ntl- ro.. -Lnta to : bout
'"3, 50,'",: :,--;s, e000 -, t -c e i ,e:'- f L,1-n,000,000 yard" w ul'1 'be an
i c c -o .f 1 .rc t.; .is .rr' P '.., h or, is a ..ut 7 per-
en t : t.. ',46t, ,0rC'0 0 yan --r -i by t Plna. The
ir.trodclction .f no-' .'.,o t 'in-. thi r. -irs ir.r' r---r. t uf m 1, i eqiuip-
mcnt ar i t 1! to c1 th c hi f "- ins '.r --h c t.-tc--. t --t .' in.. .try at
present. It ; 1-ls s- at- t:' t t -.-r -. b.t-.. n -0pi' ir.,- nd
, v;r .nr nu t I' ".varsc ', r. t I "-.e- rt ..:frcti.r. o" 1 : ,1 ji lity
c'ttor. must eto .nsur': 1.

In contr: st t j for.-.:' yearn .i'e-, t'. c-tt j) t xtil... .ir.--.try had
v, r:. li',- C-.l'r:'r -o-ver -..f r 'w c 't. t' a e fro'-'1n. tl]., cncouie -Lt re-' iffi-
clties in mra:in s-.q.:lies Inst -ntil tl- nt cr'.'p e.- ca.3 nm.ilr' e,
present ttc., :. .f c tt': '.r chira te'n .'. as "c:non -id .-rab -'e t n.l sjch as
we have ever 'a2:i before (-cc .rin-: t.) the C0!.nirm an of ti- Cou-cil of
P. oplc3' CI--i:miss-ars).









ORIENT: Cotton consumption restricted r_. Jap". ve low i Chi!_ a
but high in lindia
3-1-
Japan. Total production of yarn by Japanese mills in _'etruary amount-
ed to 277,000 bles (50o pounds) compared with 270,000 Lants in January and
330,000 bales in February last yer.r In February this year, iho-ever, 72,009
bales were produced from a mixture of cotton and st'ple fiber, whereas in
January orly 21,500 bales were mixed and in F-brupry last year na'ne of the
yarr produced was mixed. In terms of raw cotton content the yarn produced in
February this -ear was .sauivalent to approximately 213,000 bales of pure
cotton yarn. This was about 5 percent below January and 22 percent below Feb-
ruary last year. During the first 7 months of the season, the total equivalent
production of =ure cotton yarn was approximately 1 percent below the corres-
ponding period of last season but larger then any other like period in history.

It is reported that this reduction rn yarn production in January and
February was due, at least in part, to the chaotic conditions in the Japanese
industry. The serious shortage of raw cotton has been an important factor
contributing to the drastic decline in cotton cloth exports. As a result, it
is reported thn.t the Japanese Depoartimnt of Commerce anO Inddu-tr:. has decided
to relax the drastic curtailment f raw cotton imports and to allow a monthly
importation of 238,000 bales effective April 1, It is o-tirated that this
amount is sufficient for tie production of ab-'ut F25,000 bles of pure cotton
yarn. This, together with the re-ul-.tions requiring the admixture of staple
fiber in yarn used in making piece goods for Japane se consumption, will
enable mill activ.itl to be maintained at about the Fnbr-iury level or possibly
slightly higher. Whether or not activities continue at this level, however,
will depend upon the ability of Japanese mills to sell cotton yarns and piece
goods.

Cotton cloth exports in February amounted to 183 million square yards
compared with 163 million in January. TWhile this represents a substantial
increase, the exports for January were the smallest for the month since 1933.
Pessimism is said to continue regarding the export outlook for the immediate
future, in view of the rising prices since the control measures were instigated
last August,

In addition to increased manufacturing costs and taxation, it is said
that the extreme uncertainty within the industry has decreased manufacturing
efficiency. Other handicaps during recent months include the decline in
business conditions and the spread of voluntary boycotts in some of Japan's
important cotton textile export markets, and uncertainties with respect to
I/ Based largely on radiograms of March 16 and 17 from the Shanghai Office
of the Bureau of Agricultural Economics, based on data furnished by
Kenneth C. Krantz at Osaka.


cs-17


- 13 -










cotton textile prices. It is reported that the Japanese Goverrment is greatly
concerned over the cotton te::tile 3xport situation from the standpoint of its
effect on the trade balance anrd enplojyent. The Government is said to be
considering giving further exr~'t subsidies rlthou-h no information is avail-
able regarding the means of maling these suoidies.

China, include: M nchurin. Hill acti-it:.- in Shanghai increased considerably
from early FeCruary to early March ond some slight increase occurred in other-
parts of China.-. It is estimated thrt in early February the monthly rate of
cotton consu~moticn was r puroximatel: 95,000 bales compared with 85,000 bales a
.,nt.h ..r1 .. c. .Oibles a year earlier. iegotiatiors nith respect to
the reconstruction of JaT. ..ese 'ills in Tringtao bec-ae more active toward
the end of February. s- 'esent-'tives appeolr-d to the annrnese Ministry of
Finance for low interest -ates or a loan of "0 nill.ion yen for the installa-
tion of 450,00 spindles ar.n 9,d C loor.:s to a.e appropriated in proportion
to the forene- capacity of the mills which were destroyed. It is not yet
known rhethe. the loan vill be granted, out if the plan is approved, it is
expected to i ke smore than a ye-r to cor-lete the reconstruction, although
partial operation of thesa mill.3 probablyy will be resumed this fall.

S Shanghai sr-oL yarn prices ad'.-anced s',..rply during Febru.ry and early
March owing to inc-r. sec- imaar. front South '".ina ports, cspec illy;Canton.
Prices of Chinese cotton in Shanghai made E:.1sI11 advances, while prices of
foreign growths rho-ed ro significant irprcvement,

India.- Tr-ad reports i,,d.icnte that nill consump-tion of raw cotton
in India continued at an- unusually high level during Feb o..ar;. As a result,
total cotton ccns- a-t ion :,- Indian mills for the first 7 months of the
season probably was larger than in any- like period in history.

SUPPLY

Develo.ient point to shar reduction in
worlf. Dro'.-.crtior.

With little change expected nfter Februar~ or March in the estimates of
the 1937-30 wcrld c-itton -production and supply of cctton, and with planting
getting under way- in the United States and several foreign countries, new
crop prospects usually become of increased importance about this time each year.
W Based largely on a rad iogrr.n from the Shangnai Offic'e of the
Bureau of Agricultural Economics dated March 12.


- 14 -


CS-17








cs-17 15 -

While it is obviously too aarly to :3a:e an accurate estimate of either acreage
or production, it is generally agreed that a number of rather ~unusual cir-
cumstances in the situation make it seen quits likely that the 19 7-39 world
crop will be cons-i: erably smaller thLn the record production of 1937-38.

In the United States, the recent cotton referendum indicated that
more than 90 parcont of the cotton fnPmers were in favor of a cotton market-
ing quota in 1938-39. This sukgests that the 1938 domestic acreage may not
be naterially different front the nationall acreage allotment of about
26,300,00C acres. With a 10-year average yield (192g-37), such an acreage
would give a crop of about 10,100,000 bales and with yields equal to the
past 5 years, a crop of 11,200,000 bales. A crop within this range would
be 7,700,000 bales to 5,9C3,000 boles, or 40 to 47 percent smaller than
the record crop harvested last yenr. The per acre yielc in 1938 could
materially exceed the unusually high average of the past 5 years and the
domestic crop still be very nuch smaller than that of 1937.

Because of the materially lower prices received by foreign cotton
producers during the current marketing season and the fact that in China,
especially, nai-' pr'oiucers have boen unr-ble to s-11 nuch of their cotton at
any price, it is expected that foreign acrzaga and production in 193g-39 may
be lower than a yenr earlier.

It is no doubt quito generally recognized, however, that in view of
the prospective world rmill conauiirtion of cotton during the 1)37-3g season,
the world carry-over of raw cotton on August 1 next will be several million
bales larger than a year earlier. It is quite possible that the increase in
the carry-over may entirely offset the reduced production.







Cotton: Exports from United States, specified


February_
Average for: :1938 as
Country to 10 years 1937 1938 centage
which exported ended : averagee
1932-33 _... --
S 1,000 1000 1,000 Per-
balos b es bales cent

United Kingdom 49 107 93 65.8
France ....... 61 47 25 41.0


: : ~'536 as a per-
S1936-: 1937-: teof
37 3 erge 1937

1,000 1,000 Per- Per-
bales bales cent cent


1,336 3 60 1,293 96.
645 55 640 99.2
464 235 367 79.1
1,314s 453 572 -42. 4
910 1,076 336 36.9
197 10 3.o
11 702 1,017 125.4

5,711 3,921 4,231 74.1


I00.3
139.4
156.2
126.3
31.2
60.0
144.9

107.9




Full Text
xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID EVZTIPWJJ_8N40ZL INGEST_TIME 2013-02-14T17:23:24Z PACKAGE AA00013000_00009
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES