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BUREAU OF AGRICULTURAL ECONOMICS
UNITED STATES DEPARTMENT OF AGRICULTURE
APRIL 30, 1940
COTTON PRICE RELATIVES IN FOREIGN CURRENCIES, SPECIFIED MARKETS, 1927-39
AUG. 1927-JULY 1926-100
U. S. DEPARTMENT OF AGRICULTURE
BUREAU OF AGRICULTURAL ECONOMICS
IN THIS CHART PRICES WITHIN THE COUNTRY OF PRODUCTION, EXPRESSED AS A PERCENTAGE
OF THE PRICE IN 1927-28, ARE SHOWN FOR FIVE MAJOR GROWTHS OF COTTON. THE BREAK IN THE
LINE REPRESENTING BRAZILIAN PRICES IN THE SUMMER OF 1932 IS CAUSED BY A CHANCE IN THE
TYPE OF COTTON QUOTED BUT OTHER PRICES ARE COMPARABLE THROUGHOUT THE PERIOD. STABILITY
OF COTTON PRICES IN CHINA IN 1929 AND THE RISE IN 1930, WHILE PRICES IN OTHEq COUNTRIES
WERE DECLINING RAPIDLY, ARE ACCOUNTED FOR BY A DEPRECIATION OF THE CHINESE YUAN BY MORE
THAN 50 PERCENT IN THAT PERIOD. LIKEWISE, THE ADVANCE IN INDIAN AND EGYPTIAN COTTON
PRICES, RELATIVE TO PRICES IN OTHER COUNTRIES IN 1931'OCCURRED AT THE TIME OF THE
DEVALUATION OF THE POUND STERLING TO WHICH CURRENCIES IN THESE COUNTRIES WERE TIED.
BRAZILIAN CURRENCY WAS DEPRECIATED ABOUT 50 PERCENT IN THE 1930-31 SEASON, AND IN 1934
A DUAL EXCHANGE RATE HAD THE EFFECT OF LOWERING THE VALUE OF THE MILREIS FOR COTTON
EXPORTERS. SOME OF THE EFFECTS OF THESE MEASURES ARE READILY APPARENT IN THE PRICE
CHANGES SHOWN ABOVE. CURRENCY CHANCES ARE AT TIMES MORE IMPORTANT THAN FACTORS DIRECTLY
AFFECTING THE COTTON SITUATION.
;:r *y... .. .. ..
YEAR BEGINNING AUGUST
THE C 0 TT ON SITUATION
The outlook for cotton exports during the remainder of the season
was clouded this month by the official decrees of the British Government
affecting the textile trade. The rationing scheme which restricts the
sale of cotton and other textiles for domestic consumption to about 75
percent of pre-war trade \was placed in effect to facilitate the filling
of military orders and insure an adequate supply of goods for export.
The home trade in the United Kingdom is estimated to account for about
two-thirds of the output of cotton textiles, and the order may reduce
consumption over a long period.
A factor which may more directly affect United States exports in
the near future is the order which reduces the monthly allocation of freight
space for American cotton to England from space for 100,000 bales, which
has been provided in each of the last 3 months, to space for only 50,000
bales in May. Reports of the British Cotton Controller show cotton sup-
plies equal to g months' requirements, so it seems unlikely that greater
amounts of freight space will be provided in June and July. However, while
this probably means that less than 300,000 bales of barter cotton will be
shipped this season, and some of the higher estimates of exports have been
reduced, it still seems probable that exports will exceed 6 million bales
during the full season.
Domestic cotton consumption in March was lower than in March a year
ago because of holidays which resulted in two less working days than in
March 1939. Total domestic consumption for the first 8 months of the season
of 5,331,00n bplar i- a record for this period, well above the 4,609,000
bales in th-: comn-r-ble period. l.-st year, though only slightly higher than
the 5,29S,000 br.les consumed in the first 8 months of 1936-37. To equal the
record consumption (7,350,000 bc-les) of 1936-37, domestic mills will hrve to
consume an average of 655,000 bales in each 8f the last 4 months of this
season, or Pn average of 30,200 bales per working day. This rate per day com-
pares with 29,800 bnles in March, 32,000 in February, 34,400 in December,
26,600 in the last 14 months of 1935-39, and 30,900 bales per working day in
the last 4 months of 1936-37. Consumption per day in the last 4 months of
the season usually avernges somew'h-.t less than during March.
Cotton mill activity ir; Europe outside the German area, in Canada, and
in China continued at a hiph rate, though in the United Kingdom it was
slightly below that of last month. Tho lck of skilled workers was recognized
in the United KingIom by :i ir.r-nsc in allowable spinner margins. In France
the fixed price for American cotton was raised 10 percent, presumably to es-
tablish a price relationship f-.vorable to use of other growths.
In Japan and India there were further reductions in cotton consump-
tion, with more difficulty in price competition beir.n experienced by Japanese
textile e:.orters because of the increased costs of manufacture in Japan.
The Bomboy textile strike was settled in mid-April after forty days' duration,
This should result in increased cotton consumption in India.
The rise in domestic cotton prices during the past month has been small
in relation to the more volatile commodity prices such as wheat, but cotton
prices in Liverpool have gained over 1/2 pence in the last month. The price
of American cotton in Liverpool has advanced more than prices of other growths,
making the sale of American cotton more difficult, but very little additional
American cotton was expected to be sold in that market this season even under
Domestic prices show sliLht gain
Prices of spot cotton in domestic markets have been very steady,
with a slight upward. trend over the past month. The average price of middling
7/8 inch in the 10 designated spot markets reached a low for 2 months of
10.18 on March 26 and from that point advanced to the 10-1/2-cent level.
The quotation on April 25 was 0.145 cents, a net rise during the month of
27 points, and compares with 8.63 cents on April 25, 1939.
While there was a further reduction of domestic mill consumption in
March, increasing sales of goods early in April improved the outlook, and
the steady upot prices may reflect the need for further withdrawals of loan
cotton before the season ends. If more leon cotton is needed, prices will
have to remain at v level which will make this profitable. Announcement of
termination on May 15 of the Commodity Credit Cbrporetion's "exchange plan"
which gave merchants the privilege of excharging better-grade cotton for low
grades, on a valuc basis, may also slightly increase the demand for loan
cotton. While many of the fundamental weaknesses in the situation mentioned
last month still remain, most indications point to a very small supply of
cotton outside the Government loan or o'.nership when the season ends. This
factor is contributing much to continued price stability in cotton.
Prices in Liverpool
There has also been some recovery in cotton prices in the Liverpool
market in the past month, a part of which is likely due to the extension of
the war and the anticipated reduction of shipments of American cotton.
American middling spot cotton at Liverpool on April 26 was quoted at 8.07
pence, as compared to 7.52 pence on March 26. At the official sterling rate
of $4.025, this represents a rise from 12.61 cents to 13.53 cents, or 92
points. On the other hand, if the prices are converted to cents at the
commercial rate for sterling exchange prevailing at the time, the price on
April 26 becomes 11.80 cents and the price a month ago was 11.31 cents.
There is some difference of opinion rs to which exchange rate should
be used for these conversions. Receipts from sales of cotton to England
are sold at the official rate; nevertheless, the commercial rate apparently
continues to influence cotton prices. An example of this occurred on April
9, when cotton futures in Liverpool advanced the allowable limit of 25
points or 1/4 pence. At the official rate of exchange this meant a rise
of 42 cent-points, but with a drop in sterling exchange from $3,57* the day
before to $3.45 on April 9, conversions to cents made at these commercial
rates resulted in prices which were about unchanged for the day. There is
no certainty that the price rise and drop in sterling were connected, but
when only one rate was in effect prices usually reacted in this same manner
to a drop in exchange. However, since spot cotton transactions are settled
at the official rate, the table on spot prices has been reworked using the
official exchange rates since last September. If this table is compared with
the similar table published last month, discrepancies will be noticed where
ever the two exchange rates deviated, but the columns showing percentage
Cotton: Snct price p3r round, specified growths at Liverpool
and New Orleans, specified periods
: Liverpool : New Orleans
: American : Indian : Eg~ytian : Brazilian : American
:Fine Oormra Tl: F.G.F. Urpjrrs:Fair,Sao Paulo:Middling 7/g"
Season, : : : As a : : As a : : As a : :Spread
month : Mid- : Low : : of : : of: : % of : :Liver-
or day :dling : Mid- :Ac- :Ameri-: Ac- :Aameri-: Ac- :Ameri-: Ac-
:7/8" : dling:tual : can : tual : can : tual : can : tual
: : : Mid- : : Mid- : : Mid- :
: : : :dling : :dling : :dling :
10-yr. av. : Ct. Ct. Ct. Pc'. Ct. Pct. Ct. Pct. Ct.
to 1936-37: 14.50 13.60 1i.19 78.o 17.12 117.9 14.08 97.7 12.65
1936-37 : 14.62 13.16 10.37 ,4.4 17 .0 119.0 14.12 96.6 12,79
1937-3S : 10.31 .78 7.96 77.1 13.10 126.7 10418 98.7 8.79
1938-39 : 10.15 S.71 7.14 70.4 11.80 116.5 9.63 94.9 8.73
Mar. .. :
Mar. 1 ....
15 ,*., ,
Apr. 5 **.-
Compiled from reports of the Liver-rool Cotton Exchange except for the last 4 weeks ,
which are from cables to the Bureau of Agricultural Economics or from reports of
the New York Cotton Exchange. Prices were reported in pence per pound and con-
verted to cents per pound at current official rates of exchange.
relationships between different growths of cotton remain unchanged except in
the fractional parts, which vary slightly because of the use of rounded figures.
During the past month, prices of American spot cotton in Liverpool have
advanced more than prices of ether growths, and more than the spot price in
New Orleans. As a result, the price relations among growths are now less
favorable for the sale of American cotton abroad than for several wooks. On
April 26, the price of Indian Oomra #1. fine was equivalent to 78.9 percent of
the price of Amorican middling, compared with 82.5 percent on March 21.
Similar comparisons on other growths show Egyptian Uppers fully good fair at
130.4 percent compared with 137.6 and Brazilian Sao Paulo, fair, at 100, or
oven with the price of Amirican middling, compared to 101.3 percent a month
ago. Likewise, the Liverpool spot price, when converted at the official ex-
change rate, was 2.95 cents above the Now Orleans spot price on April 26, com-
pared with only E.26 cents above on March 21.
ANERICAH: Estimates reduced slightly as barter
cotton may not be shipped
Exports of cotton from the United States during March totaled only
434,000 bales, or 31.5 percent above orjorts in March 1939, compared with
747,000 bales in February, vhich was 183 percent above the same month a year
ago. For the period August-March, exports totaled 5,350,000 bales, 92 per-
cent above last year, but slightly less than the 10-ycar average (1928-37) of
5,450,000 bales in this period.
From August 1 through April 25, domestic exports totaled 5,578,000
bales, or 88 percent above exports of only 2,965,000 bales in the comparable
period last season, according to the reports of the Now York Cotton Exchange,
A factor v;hich may become of importance in our export outlook during
months immndiactoly ahead was the announcement in the third week in April that
freight space for only 50,000 bales of American cotton would be provided dur-
ing Vay by the British Government, instead of space for 100,000 bales which
has boon provided during each of the last 3 months. No announcement of avail-
able space for cotton during June and July has been made, but from the official
announccm,'nt that stocks of cotton in Great Britain are equal to needs for 8
months, it does not seem likely that more space will be allocated for American',
cotton in the last 2 months of the season. In addition, the announcement state
that part of this freight space allotment will be used for cotton to be shippo
under the cotton-rubber barter arrangement. During May plans call for the
shipment of 20,000 bales of barter cotton, leaving space for only 30,000 bales
of com=rrcial cotton.
Since the first barter cotton was shipped last fall it has boon gon-
orally assumed in the trade that all the 600,000 bales (plus a possible
adjustment because of our subsidy program) would be exported this season.
However, to the end of January only 217,000 bales had moved out, and at that
time Great Britain announced that no more freight space would be provided
- 6 -
Cotton: Exports from United States to specified locations,
. : Au.ust
: 19q-3-6: "
: Aun. Mar.
Poland and Danzig :
Estonia .. .......
Greece ......... .:
Italy ............ :
Norway .......... .
R Spain ............:
United Kingdom ...:
*if Yugoslavia .......:
1,000 1,000 1,000
4,364.4 2,058.0 1,783.5
5,598.4 3,326.8 2,785.9 5,350.4
Compiled from Monthly Summary of Foreign Commerce of th2 United States.
SIncluded in Germany.
3/ Exports for 9 months, Aug.-April, contained in Germany, if any since
4/ Exports for 2 months, Aug.-Sept., contained in Germany, if pny since
Sept. 1939. 5/ Totpls were made before figures were rounded.
- 7 -
for barter cotton for 3 months. With the announcement that space for 20,000
bales is to be provided during May, and the further statements that Britain
has ample stocks of cotton on hand, it is possible that no more space will
be allotted for barter cotton in June and July than in May. If this should
prove .to be the case:, total shipment of this cotton for the season would
amount to only about. 277,00.0 bales instead of 600,000 bales. While this news
has caused some revision in the higher trade estimates of total exports
during the season, there is still little doubt that more than 6 million bales
will be exported in the current season.
To show the possible effects of further extension of hostilities in
the European war, a table has been prepared giving cotton exports from this
country to all European countries. The material for certain of the smaller
countries may be especially interesting, since shipments are expected to cease
to those countries engaged in the war or effectively blockaded. It will be
noted that several of the smaller neutral countries have already taken sub-
stantially more cotton this season thpn they usually take in a full year,
and some of this cotton may be moving to the German-controlled areas. In
a few instances, as in Czechoslovakia, the statistics may be slightly mis-
leading. When cotton.is consigned directly to the country, it is reported
as exported to that country, but cotton destined for some of these land-
bound countries was sometimes consigned to agents at ports, notably Bremen,
and hence classified as exports to Germany rather than to the country where
the. cotton was actually consumed. However, the table will 'serve as a guide
to possible changes in cotton shipments in the European area.
FOREIGN COTTON: Egyptian exports for March, and Brazilian
for first .7 months below exports a year earlier.
Exports of cotton from.Egypt during March were again smaller than in
the same month a year ago. Shipments to the United Kingdom and France were
above those .of a year earlier, but reductions to other countries made total
exports 13 percent below March last year. For the 8 months of this season,
exports were 6 percent above the comparable period a year ago.' Shipments
of Brazilian cotton in February(the last month for which official data are
available) were 37 percent below February 1939 shipments. For the first 7
months of this season Brazilian exports were 513,000 bales, or 25 percent
smaller than in the like period of 1938-39.
DEMAND AND CONSUMPTION
UNITED STATES: Consumption declines further, but
outlook in Aril somewhat better
For the first time this season, domestic consumption in March was
smaller than in the spme month last year. The rate per day was above that in
March 1939, but because of the smaller number of working days, total con-
sumption declined. Consumption during the month totaled 626,000 bales, as
against 663,000 in February and 650,000 bales in March last year. For the
8-month period, domestic mills used 5,331,000 bales, compared with 4,609,000
bales in the same period last year, and the 10-year average (1928-37) of
4,06 ,000 bales. The 10-year average of total consumption during the seasons
- 8 -
Cotton: Exports from specified countries, average 1928-29
to 1937-38, and seasons 1937-38 to date
': ",rch : August to ,March
Country of :l--yr. av. : :194u :0-y, ~.:.: : : : 1939-40
origin and :1928-20 :3 :13 :as a : 19'?-2P:193-:17-:38-: 9-: as a
destination : : : o : tc : 38 : 39 : 40 : % of
:197-___ : : : :19_ : 193',-3 : : : 1938-39
:1,0c0 1,0CO 1,000 1,000 1,0 1,0000 1,000 1,000
:running run. run. run. Per- running run. run. run. Per-
: b.1es bales bales bales cent bales bales bales bales cent
united States tc:
United Kingdom :
Italy .. .....:
Germany 2/ ..:
Japan ..... :
: 1___ 42, 3.C 46' 131.5 5, 0' 4,657 2,796 5,350 192.0
: 1,0'0; 1,'"C: 1,. J'C : 1,COO: : 1,0C"' 1,000: 1,000: 1,000:
: bales: bales: bales: bales: Per-: bales: bales: bales: bales: Fer
:478. b.:47l lb.::478 lb.:478 lb.: cent:478 lb.:478 1b.:478 1b. :478 lb. : cent
139 156 181 157 86.7 1,191 1,306 1,195 1,270 106.3
February : August to February
compiled from official sources.
L Less than 500 bales.
Includes Austria beginning January 1938.
5/ Not available by countries.
- 10 -
1928-37 was 6,057,000 bales. Thus, the first 8 months have, on the average,
accounted for 67 percent of the annual average consumption in this period.
If this percentage were used to estimate total consumption for the present
season, the indication would be 7,956,000 ba les. As the season progresses
without substantial change in these indications, it strengthens previous
statements that, even with a more-than-seazonal decline for the remaining
months, domestic consumption fur the season should reach 7-3/4 million bales.
With no more than seasonal decline, it would equal the record of 7,950,000
bales consumed in 1936-37.
Since cotton consumption in March is normally about 10 percent above
February, and this year consit.ption declined from February to March, the
index of cotton-mill activity, adjusted for seasonal variation, registered
quite a sharp drop between thlme months. The index figure for March was 117,
compared to 125 in February, 130 in January, a record high of 145 in December,
and 114 in March last year. During the first 3 weeks of April there was
some slight increase in mill activity, rund less expectation in trade quarters
of further curtailment of a substantial nature in the near future.
Manufacturers' sales of urnfinished goods turned up sharply in the
first 2 weeks of April, after having been well below production most of the
time since the first of the year. Sales of print cloths exceeded 25 million
yards on several dnys, and it was estimated that total mill sales for the 2-
week period were about three times as great as production. Since that
period in early April, goods sales have been slow, hampered somewhat by a
dull demand from retailers because of the late spring.
From August 1 through March 31, domestic mills consumed 89,000 bales
of foreign cotton, compared with 81,000 during the corresponding period last
year. A total of about 37,000 bales of this consumption in the current year
was Egyptian cotton, the bulk of the remainder being cotton from British India.
The former is largely long-stpple cotton not grown in this country, nnd the
Indian imports ar2 mostly very short cotton used largely in blanket factories.
Consumption of American-Egyptian cotton during the 8-month period amounted
to 15,600 bales, about 50 percent more thnn the 10,00 bales consumed in
the comparable period last year.
EUROPE: Recent developments less favorable
Extension of the war to the northern countries perhaps means that no
more cotton shipments will be made to any of the Baltic area. Norway and
Sweden consumed 168,000 bales of cotton in 1938-39, 137,000 boles in 1937-38,
and an average during the 5-year period 1932-36 of 140,000 bales annually.
In addition, Denmark usually consumes about 35,000 bales. Over 8O percent
of all this cotton has been American in recent years. It is reported that
relatively large stocks of cotton are now on hand in the Scandinavian coun-
tries, so consumption for a while may not be materially affected by the
European mill activity in other areas continues high, though there
were several restricting influences in operation for much of the past month.
With the present difficulty of obtaining accurate and current figures on
- 11 -
consumption, it is possible only to speculate on the real meaning of the
available news. In Britain, there was difficulty in booking new business for
several weeks because of an e-pected change in allowable mill margins by
the Cotton Controller. The announcement increasing these margins, made in
the third week of April, recognizes the higher labor costs resulting from
the still acute shortage of skilled labor in the British spinning areas.
A more important decree of the Cotton Controller, made late in April,
prohibits the sale and distribution of an unlimited volume of textiles.
Specifically, retailers' distribution of cotton goods will be reduced to 75
percent of the quantities they distributed last year, and no yarn orders
will be filled for domestic merchants for 1 month. This step is taken to
enable mills to fill war orders and to make goods for the export markets,
which Great Britain is fostering by all possible means to increase its supply
of foreign exchange needed for war purchases. If successful in this venture,
it may be of great importance to cotton producers of the world. Extension
of these restrictions in the domestic markets might lead to a situation like
that existing in several other countries -- Germany, Italy, and most notably
Japan. In the latter country there is a practical prohibition against manu-
facturing cotton goods for the home trade, and in the former two countries
it has long been required that spinners mix certain percentages of artificial
fiber into all fabrics to be used within the country.
It has been estimated that of the 2-1/2 to 3 million bales of cotton
consumed annually in Great Britain, about two-thirds of it goes into goods
for the home market. The present decree may, of course, be a temporary
measure to meet an acute situation, but it is entirely possible that it may
foreshadow a reduction in British cotton takings while the war lasts.
Orders which British mills have on hand give some indication that the
quota restrictions may be temporary. Trade reports indicate that mills are
booked so far ahead with government and private orders that they cannot
guarantee delivery on new business until next fall, and stocks of cotton
within the country were reported by the Cotton Controller as equal to 8
months' needs at the present rate of consumption. Mills generally have their
cotton purchased for spring requirements. However, with increasing costs
resulting from the war, English spinners and manufacturers are encountering
difficulty in competing with exporters in neutral countries.
In Italy cotton mills arc running at capacity rates, with sales booked
through the summer. There have been reports that, because of the difficulty
of obtaining pulp from the Baltic countries, less rpyon staple fiber is being
manufactured in Italy, which may partially account for the increased takings
of American cotton.
In France and other European countries, textile business has been
somewhat slower, with new business hesitant on account of the tense political
situation, but government orders are still keeping consumption at a relatively
- 12 -
CANADA: Mill consummntion at record level
Exports of American cotton to Canada this season seem likely to
exceed 400,0C0 bales, and with mills running at a very high rate, this
cotton will be largely consumed. Business activity in Canad. has been
greatly stimulated by war orders, and there is an outlook for continuation
of present rates while the war lasts. Cotton consumption will reach a new
record this year, and the outlook is good also for the coming season.
ORIENT: Mill activity increased in China, Janan, and India
Speculative activities in the Shanghai yarn market in recent weeks
overshadow oth-r developments, and hve made mill operations very profitable.
A recent cabled report from Shanghai says this speculation is due largely to
further depreciation of the currency, and tells of yarn prices soaring to
a record high of 1I20 yuan per bole of 500 pounds, 20 counts. This repre-
sents an incrcas? of b2 percent since March 1, and 420 percent over prices
in June 1937 before the outbreak of hostilities. Since raw cotton prices
have advanced much less than yarn prices, spinning mills are r-ported
operating at profits of 50 percent net, as compared to only 5 percent profit
2 months ago.
In the Shanghai area cotton mill activity increased in March, with
Japanese mills operating at 100 pcrn~nt of normal, Chinese mills at 98,
and British mills at 95. Total cotton consumption: in C1 :ia, including
Manchuria, during March was estimated between 1:5.,000 and 150,000 boles,
compared to 135,000 bales in February.
Chinese mills are uding high percentage of American cotton this
season, largely because of the short crop in China and the favorable price
parity of Americpn against Indian cotton when commitments were made earlier.
Cabled advices stated arrivals of China cotton in the Shanghai area had de-
creased further and amounted to only 2 percent of consumption during March.
Cotton mills at other ports and in the interior nre less dependent on
foreign cotton, but it seems that only small amounts of Chinese cotton will
arrive at Shanghai until the new crop moves in September.
In np;an cotton consumption has continued to decline, the total for
7 months as reporter! by the Japanese cotton spinners being only 1,397,000
bales, the lowest amount in this period since 1930-31. Japan's need for
cotton depends largely on its export of textiles, since domestic use of
cotton by civilians is forbidden. Exports of cotton cloth by Japan during
the first S months of this season have Pmounted to 1,612 million square
yards, which was 7 percent higher than the 1,513 million yards exported in
the comparable period last year but somewhat below exports in the like
periods from 1934 to 1937.
The cotton textile situation in Japan has changed rapidly for the
worst in recent weeks, and consumption prospects and estimates are now less
favorable due to the heavy accumulation of piece goods which were not antici-
pated. On March 31, 1940, cotton cloth stocks in Japan were estimated at
more than 1 billion squ-are ynrdcs, era.ivalent to :moe Thin 5 s:o .tbs' exports
at current rate of shi-ment, which Foes f,-r to exlain the refusal of the
Finance Ministry to e~c-dite the rp',ting of excl-T :,r permits governing raw
cotton imports The 00r'ka Consuliat'E I .s beaei info:' r!. -o more fi .7r .s on
cloth stocks i.ill be publi-hJr' ajfr .A11'-1 1, v hich ,zd.icates the serious-
ness with which autnhritieP ccnsol de ti-. aen accaitii he "cline
in ster..lin '-as s Lurt the comrctitive c~tiion of J7pan-es t:extile e:-7orters,
and prevei t-,.1 a. o'r. in Jr.pr:'.:. cloth eC-q:,rts, wh' ch 1 r- :'-:.r h&i. exp(:c d
might resv.lt from the 'i.ope" -i "'ar
PBr.zilian Gotton is c;u1rr',tl;- selling in J.i-,an at unusually w.'J
di srounts uni.r Aimerican cot.cn. J-r' c, hos recet.,ly renewed her tre C
a,; eem.cnt vith India, which pr-,riides for a basic ir'plri;, quota of 1,0(0,000
belos of Irn.l.n cotton for e-ports of 300 million yy-p. of cotton te-:;iles
to India, v'.Glch ccm-rpmsati-'g _.,djuast-ents for lr1 g-r or n.smlei ~ .,' It
has been reported. aso that Jvpan i a p"e'?in to make .rter crra~nigrnts
w-ith ESypt n-;d some of the South J.;.*rican c.-."?'tris to take larger mncunts
of cotton ft,'m those counLries in e:-c:T-n,.,o .f:r 'ar -cr outlets for Jap.nese
Con.r-r'.tion of Ir:lian cotton .' Ind*ian iy .. was only -001000 brles
of 1OO pou_.. each .iurirg 'Macb, 3s .; :'re.i I 21;i -. '5, COO bales in Fetru-.'ry,
263,000 b.'., ir Jin'.q:r, n 24h,0''C 'l-es irn !.'rch last year. Total con-
upilr.on :.f" lndia.n cott.cn in I:nr .,i:.ls duirin- the 8 months A-~i .-I: .rch
was 1,9.8,0,0 bal.cs -- comrn:vh..c :.c.s3 -..a n th.2 2,0r3,000 bales conrmu..-..
in this period. ln.st year but aove irC';iamption in this period for r.r.y other
recent -ear. The strike ..hich pr:v=.i.dc. in 3omnbny textile mills through-
out March accounts for a. ilrgz;e -rt of this r-ed-ced consuc.s:ption. A settle-
ment of the ctr-kke was mr--de on April 1i, aft,?r it ha.j. lasted. O0 days.
This mey r'-E.i.t ir some incrensex'. consumption in c-"ijii- months.
ACAE, PRLODUI3T:C~-Z STOC::S, I-.D 3 ':-LY
Br i--lian cotton. pr.duc-ion
Th? final" esi-.1te of the c'gCq- cotton cron in South Braz.il,
public.-e.d c'ly i.,- A..rl., ch..-s .ro. ,'.on cf 1,4l4,000 bales of 478 po-unds
net. Ihis iiirt; c-.n '. 'usid to re:-f -, the tble pli rhed on page 12 of
the "Cotton Situation" ir7 J1b-,"r~,r 1i0. This final estimate revises the
total production in Bra-il in 13:q--9 from 1,c13,000 bales to 1,:35,000 bales.
Ths third cstimart3 of the 15939-4C. rco in 1''rth Brazil indicates
lower prcJ'.cticn thPn- slho' i. the .'-ce v noticnod table. '-"is latest esti-
maite redu-s.. production from b631,CO, to 66,OC. p ales of ''78 po'r.;s net
weight. The firsL estimate of the 1c79-1 r crop in Sou'th Bra-il indicates
production of 1,4L'9,OCO bales, givi-,- preliminary estimate for total
1939,1'O Erailian production of 2,10.,0C0 bolos.
Crop .dianag' frc-m cold wepather e?.st cf '.is-3issiso-)i
'l.e fr.ezir.9 weather which ext-endci nearly to the Gulf in miO-A-ril
caused mlaCh dcnmage to the crop cast of the :A-ississippi Rivcr, and. del:.red
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UNIVERSITY OF FLORIDA
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work of preparing fields for planting,. Where cotton was up much replanting
was necessary. Following the re-ort o-! t-.ese conditions by the Weather
Bureau prices on distant futures contr.l-ts C'csel on new crop delivery) ad-
vanced about a dollar a bale in relata.n o aroio pr.ces.
Loan cotton released
From December 13 to Ap-il 24 the Commodity Credit Corporation re-
ports it has received requests for the release of 1,565,651 bales of 1938
loan cotton. Additional "equities" against loan cotton are known to be
held by merchants, and the recent strength in prices may see further sub-
stantial amounts of this cotton repossessed for consumption and exports this
Warehouse stocks in Jpan
A late cable reports March cotton imports into Japnn unusually large
relative to the low state of the textile industry. Stocks of all cotton
in warehouse: in Japan were 4l3,000 b',lcs on .March 31, of which 199,000
bales were '-.crican. Impcrts in MErch were estimated at 299,000 bales, of
which 15Sg,G' bales w'.ere Ai.ericnn, ns 3ompr-Td to imports of 196,000 bales
in February:: ; 2,000 bnlcn- of which wve~ 3 .ka-'rican. The heavy imports rcpre-
sented arri;vls of cotton purchases O:-'.ng the period of heavy speculation .i
last autumn. Difficulty in arranging for payments for Amn.ricpn cotton undeto.,
the present "link" system has resulted in hesitancy in making further
commitments on the p-art of Americar ecr-ortcrs, since they are said to have
received payment for practically none of the cotton now in port warehouses
in Japan. Some e:-'orters have had. to w,'it as much as 3 months for payment i
on cotton act-uall:, imported under allotments granted by J'pan Cotton
Spinners Aps-cia.oan, because no exchange permits were available.
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