The Cotton situation

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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:
AA00013000:00021

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





THE







UNITED

i CS-44


cc3^^-'---


SITUATION


BUREAU OF AGRICULTURAL ECONOMICS
) STATES DEPARTMENT OF AGRICULTURE


JUNE


27, 1940


COTTON. ALL KINDS: DISTRIBUTION OF U. S. SUPPLY. 1906-38


BALES"
I MILLIONS)


z'o



15



10



5



0


YEAR BEGINNING SEPTEMBER. 1909-IS; YEAR BEGINNING AUGUST. 1914-88
* AMERICAN IN RUNNING BALES: FOREIGN IN 500 POUND BALES
* INCLUDES SMALL QUANTITIES DESTROYED


U. S. DEPARTMENT OF AGRICULTURE


NEG. 31400 BUREAU OF AGRICULTURAL ECONOMICS


THE DOMESTIC SUPPLY OF COTTON HAS BEEN AT RECORD OR NEAR-RECORD
LEVELS IN EACH OF THE THREE YEARS 1937-39. IN THE 1938-39 SEASON
DOMESTIC CONSUMPTION WAS FAIRLY LARGE BUT EXCEPTIONALLY SMALL EXPORTS
RESULTED IN A NEW RECORD HIGH END-OF-SEASON CARRY-OVER. DURING THE
CURRENT (1939-40) SEASON DOMESTIC CONSUMPTION WILL APPROXIMATE 7j
MILLION BALES AND EXPORTS WILL EXCEED 6 MILLION BALES. THIS WILL RE-
DUSE THE END-OP-SEASON CARRY-OVER TO LESS THAN II MILLION BALES, COM-
PARED WITH 13 MILLION BALES ON AUGUST I, 1939 AND IIj MILLION SALES
ON AugUsT I, 1938.


k"-


I-k
i a'





..

qI" "


:i ***





CS-44


THE COTTON SITUATION



Summary

Recent European developments have had a decidedly adverse effect on

prospects for cotton exports from the United States and other important export-

ing countries. If Great Britain succeeds in preventing shipments to the areas

now under German and Italian control, practically all of continental Europe

will be lost as an export market for an indefinite period. Since early May th

blockaded area has been extended to include Belgium, Holland, France and Italy,

an area which utilized 2-1/2 million bales of cotton in each of the 2 years

prior to the beginning of the war last September.

Despite the temporary loss of these important markets for American and

other cotton, recent domestic prices of spot cotton have boon slightly higher

than in early May. Although prices in domestic markets dropped about 1-1/4

cents during the first half of May, prices have advanced moro than that amount

since then.

The improvement in domestic business conditions and expectations of

further improvements under the stimulus of tho large-scale armament program ap-

pear to have bocn important price-strengthening factors in recent woeks- The

continued relatively large domestic exports representing sales made some time

ago, the near-record domestic consumption, and the large Governmont-controlled.

stocks have resulted in exceptionally small stocks in domestic trade channels,..

This situation likewise has tended to strengthen prices.

In the second week of June manufacturers' sales of unfinished goods

the largest for any week since last September. As a result the statistical

position of domestic mills was greatly improved. This and the improvemonts:-

general domestic business conditions make it now seem likely that the 4I....


- 2 -





CS-44


in domestic cotton rill activity ha.s boon halted at least temporarily. In the

months iLrodiatoly ahead mill activity, seasonally adjusted, is expected to

hold steady or improve.

In Great Britain cotton rill activity apparently increased in late May

and early Juno on the strength of Government orders. Orders for the civilian

trade are reported to be relatively snail. In Japan, India, and China cotton

mill consumption was apparently about the same in May as in April. Except in

India, where it was about 10 pDrcent below May last yo-:.r, Lill consumption was

also approximately the same as a year carlior,

PRICES

Domestic prices advance 1-1/3 cents from May low;
now 1/2 cent below season's high

The price of 10-3/4 cents for Middling 15/16" cotton in the 10 desig-
nated markets on June 22 was 1-1/3 cents above the low point of May 18. It was
slightly higher than the price on May 1, having more than recovered the decline
of 1-1/3 cents which occurred during tho first 19 days of May.

Since May 1 the important export markets (for )rrrican and other cotton)
of Belgium, Holland, Italy, and most (if not all) of Frrncc have becn cut off
from most cotton-exporting countries for an indefinite period. The mills of
these 4 countries combined consumed approximately 2-1/2 million bales of cotton
in each of the past few seasons, including 1 million to 1-1/2 million boles of
American cotton. Despite the temporary loss of these important r.rkcts, domes-
tic cotton prices are now slightly higher than at the beginning of May. This
strength in prices reflects the recent rise in donmstic industrial activity and
the further improvement which is expected to accompany the large rearmament Ox-
penditurcs. The relatively small amount of cotton in trcdo channels and tho
anticipation of a loan on the 1940 crop have no doubt also contributed to the
strength of domestic spot prices during the past few wvcks.

Spot prices during the second week of May were approximately 1 cent
above those of a year earlier but 1/2 cet below the price reached on December
13, 1939. Despite the probable unfavorable effects of the war on future cotton
exports, recent prices have beon about 2 cents per pouind above those existing
at the outbreak of the war last September.

Compared with prices in early May, quotations of near-month futures con-
tracts at New York have doclinod 0.3 cent and prices of now crop contracts
have declined 0.76 cent to 9.42 conts. This suggests that the Government loan
program, aided by the stimulus given exports through the oxport-payment program,
is supporting domestic prices of spot cotton to a considerably groator oxtunt
than it is supporting futures quotations,


- 3 -






Cotton: Spot price per pound, specifiedd growths at Liverpool and''"'
Now Orleans, specified periods

: Liverpool : Now Orleans
American Indian : Egyptian : Brazilian : American
:: :Fine Oomra #1 :F.G.F. Uppers:Fair,Sao Paulo:Middling 7/8"'
Season, : : : As a : As a : As a ::Sproad
month : Mid- : Low : of : : % of : % of : :Liver-
or day : dling : 1d-: Ac- Amri-: Ac- : Amri-: Ac- : Amri-: Ac- : pool
:7/8": dling: tual : can : tual : can : tual : can : tual : ovor
: Mid- : : d- : : Mid- : : Now
: : :dling : : dling : : dling : :Orloans
10-yr. av. : Ct. Ct. Ct. Pct.. Ct. Pct. Ct. Pot, Ct. Ct.


1927-2.8 :
to 1936-37:
1936-37
1937-38
1938-39

1938-39 -
Feb. ....:
Mar. ....:
Apr. ...:
May. .....:
June ,...:
July ....:
1939-40 -
Aug. ....:
Sept. ...:
SOct. ....:
Nov. ...:
Dec. ....:
Jan. ....:
Feb. ....:
Mar ....:
Apr. q...:
May .s...:


14.50
14.62
10.31
10.15


10.02
10.17
9.67
10.55
11.04
10.61

10.16
11.21
10.65
11.66
14.14
14.81
13.74
13.06
13.47
12.95


Mar. 1 ...: 13.40
8....: 13.47
15 ...: 12.88
21 ...: 12.66
29 ...: 12.91
Apr. 5 ...: 13.15
12 ...: 13.62
19 ...: 13.57
26 ...: 13.53
May 3 ...: 13.72
10 ...: 13.65
17 ...: 12.44
24 ...: 12.44
31 ...: 12.44
June 7 ...: 12.44
14 ...: 12.16
21 ...: 13.11


14.08
14.12
10.18
9.63


9.53
9.68
9.19
9.83
10.18
9.85

9.37
10.71
10.45
11.59
14.1.
14.87
13.94
13.23
13.47
12.95


97.7 12.65


1.85


96.6 12.79 1.83


98.7
94.9


95.1
95.2
95.0
93.2
92.2
92.8

92.2
95.5
98.1
99.4
100.0
100.4
101.5
101.3
100.0
100.0


13.60
13.16
8.78
8.71


8.55
8.71
8.21
8.97
9.38
8.95

8.53
9.79
9.41
10.79
13.32
14-.12
13.11
12.53
12.88
12.36

12.90
12.88
12.38
12.16
12.33
12.56
13.03
12.98
12.95
13.13
13.06
11.86
11.86
11.86
11.86
11.57
12.53


8.79
8.73


8.60
8.69
8.61
9.30
9.45
9.37

8.95
9.02
8.92
9.40
10.64
10.79
10.67
10.43
10.54
10.05


11.19
10.87
7.96
7.14


6.95
6.85
7.02
7.45
7.61
7.31

7.38
8.56
8.41
9.46
11.69
12.31
11.09
10.68
10.70
10.23

10.90
10.90
10.62
10.45
10,53
10.46
10.88
10.78
10.67
10.77
10.85
9.84
9,84
9.84
9,84
9.8-1
9.01
9.51


Compiled from reports of the Liverpool Cotton Exchange except for the last 4-
which are from cables to the Bureau of Agricultural Economics or from reports
New York Cotton Exchange. Prices were reported in pence per pound and cover
cents per pound at current official rates of exchange.


78.0
74.4
77.1
70.4


69.4
67.4
72.6
70,6
68.9
68.9

72.6
76.4
79.0
81.1
82.7
83.1
80.7
81.8
79.4
79.0

81.3
80.9
82.5
82.5
81.6
79.5
79.9
79.4
78.9
78.5
79.5
79.1
79.1
79.1
79.1
74.1
72.5


revSi


I


17.12
17.40
13.10
11.80


11.56
11.58
10.90
11.08
11.47
11.43

11.35
12.49
12.03
12.70
15.80
17.50
17.14
17.17
17.64
17.44

16.90
16.99
17.22
17,42
17.32
17.42
17,84
17.69
17.64
18.03
18.15
17.01
17,01
17.01
17.01
16.99
19.62


117.9
119.0
126.7
116.5


115.4
113.8
112.7
105.0
103.9
107.7

111.7
111.4
113.0
108.9
111.7
118.2
124.7
131.5
131.0
134.7

126,1
126.1
133.7
137.6
134.2
132.5
131.0
130.4
130.4
131.4
133.0
136.7
136.7
136.7
136.7
139.7
149.7


10.80
10.55
10.44
10.40
10.37
10,47
10.55
10.52
10.58
10,53
9.97
9.31
10.10
10.01
10.22
10.85
10.74.


1.52
1.42


1.42
1.48
1.06
1.25
1.59
1.24

1.21
2.19
1.73
2.26
3.50
4.02
3.07
2.63
2.93
2.90

2.60
2.92
2.44
2.26
2.54
2.68
3.07
3.05
2.95.
3.19
3.68
3.15

2.48
laSti:


13.74
13.55
13.05
12.83
13.00
13.15
13.62
13.57
13.53
13.72
13.65
12.44
12.44
12.44
12.44
11.99
12.86


102.5
100.6
101.3
101,3
100,7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
98.6
98.1


- 4 -


CS-44





08-44


Cotton: Price per pound of Indian Oomra fine at Bombay and American
Middling at New York, specified periods 1/
: Bombay New York
Season, month om: r n : Spread over
Comra American
or day fine Middling : Oomra at
:. : : Bombay
10-year average Cents Cents Cents
1927-28
to 1936-37 : 9.11 12.90 3.79
1936-37 : 10.08 12.93 2.85
1937-38 : 7.27 8.75 1.48
1938-39 : 6.57 8.99 2.42
1938-39
Feb. : 6.34 8.98 2.64
Mar. : 6.39 9.00 2.61
Apr. 6.38 8.87 2.49
May : 7.13 9.56 243
June 7.17 9.88 2.71
July : 6.81 9.71 2.90

1939-40
Aug. 6.76 9.30 2.54
Sept. 7.33 9.30 1.97
Oct. 7.46 9.25 1.79
Nov. : .61 9.73 1.12
Dec. : 10.50 10.96 .46
Jan. 10.46 11.17 .71
Feb. 9.16 11.10 1.94
Mar. 8.78 10.90 2.12
Apr. 4 8.30 10.73 2.43
Apr. 11 : 8.90 10.79 1.89
Apr. 18 : .94 10.74 1.80
Apr. 25 9.12 10.72 1.6o
May 2 9.14 10.77 1.63
May 9 8.80 1o.64 1.84
May 16 7.38 9.34 1.96
May 23 a 6.73 9.17 2.44
May 30 6.39 2/ 9.60 3.21
June 6 5.82 9.43 3.61
June 13 5.83 9.98 4.15
June 20 5.97 10.15 4.18

Compiled from official or reliable trade sources. Prices of Indian con-
verted from rupees per candy of 784 pounds to cents per pound at current
rates of exchange as reported by the Federal Reserve Board.
IJ Prices of Indian are prices of spot or near futures prior to September
1932. From 1932 through March 1940, spot prices. From April 4, 1940 to
date, near futures. Prices at New York are spot prices prior to April
1940. From April 4, 1940 to date closing price of near active futures
(old contract).
2/ Price for May 29.


-5-





C s-44


fL. mrt:ercI :.:J. .orilgZ prices downn'
now exceptionally low relative to United States prices

Effective June 13, futures trading on the Liverpool Cotton Exchange
was freed from the regulation in effect from May 2S' to June 12, during which
period prices were frozen at the May 16 levol. The now regulations fix
minimum quotations at the level of Maj 16, with trading permitted under this
regulation, but daily fluctuations are limited, as war the case from Septembr
to mid-May, to 25 pence points for American cotton and 50 pence points for
Egyptian cotton. No minima apparently were place on spot quotations during
the period of fixed prices, since such quotations were considerable lower on
June 14 than on May 16 and 17,

The price of American Mioc.ling 7/8" on June 'i4 when converged to cents
per pound at the official rate of exchange was equivalent to 12.16 cents.
This was 1/4 cent less than on May 17. The price of Indian Oomra on June 14
was 4/5 cent less than on May 17. Quotations for Egyptian uppers were about
the same as on the earlier date, whereas quotations on Sao Paulo were nearly
1/2 cent 16wer. The decline in Liverpool prices, together with the advance in
prices in the United States, has reduced'the spread of prices in Liverpool
over those in the Unibed States. On June 14 the Liverpool price of Middling
7/8" was only 1.31 cents above the price of Middling 7/8" in New Orleans,
whereas on May 17 the Liverpool price was 3.13 cents above that of New Orleans.
In the past week, however,'this difference has widened again to 2,37 cents.

From early May to June 20 the price'of near-month futures contracts for
Indien Oomra at Bombay declined from slightly over 9 cents to a little under
6 cents per pound wh-en converted at the current exchange rate, which remained
practically uncharged during this period. During the same period the price of
near-month futures contracts for American Middling 7/8" cotton at New York de-
clined about 3/5 cont. As a result of these changes, the prica of Indian Oomr
at Bombay declined from 1-3/5 cents under the New York price of American, to
4-1/4 cents belct: the domestic price. Unless prices of spot cotton in Bombay
are unusually strong rclat'ive to futures contracts', as hi.s been the case in the
United States, recent spot prices in Bombay are still lower relative to spot
prices in the domestic markets. If current prices for spot cotton in Bombay
were available they might be as much as 4-3/4 cents lower than spot prices in-
New York. Such differences represent a marked change since last December,
when spot prices of Oonra at Bombay averaged less than 1/2 cent lower than spo
prices of American Middling 7/8" in New York.

EXPORTS

Domestic eroorts-continue much above last year
but considerably below average

Exports of American cotton in May were 58 percent above May 1939 but i-
nearly 1/3 loss than the 10-year (1929-38), May average. The marked increa
for the month resulted primarily from the fact that exports to the United
Kingdom and Italy wore both more than 5 times as large as in May last year.


d-6 --'






CS-44


Country of
origin and
destination


: May
:10-yr.av.: : : :140 :
:1928-29 :1938 :1939 :1940 :as a :
S to : : of :
:1937-38 : : : ,1939 :


: 1,000
:running
: bales


1,000 1,000 1,000
run. run. run. Per-
bales bales bales cent


August to May


10-yr. av.
1928-29
to
1937-38
1,000
running
bales


: : :1939-40


:1937-:1938-:1939-: as a
: 38 : 39 : 40 : of
2 :1938-39


1,000 1,000 1,000
run, run. run.
bales bales bales


Per-
cent


United States to:
Germany .......:
United Kingdom :
France .......:
Italy .........:
Spain .........:
Belgium .......:
Canada ........:
Japan .........:
China .........:
.Other countries:
Total ......:


Egypt to

Egypt to: :


Uni
Fra
Uni
Ger
Ita
Jap
Bri
Oth


11
43
338


15
27
10
26
1
7
20
31
3
53
193


21
13
5
9
0
4
24
41
6
20
143


0
72
lu
46
10
1/
3C'
3"r
12
12
226


553.8
200.0
511.1


125.0
82.9
200.0
60.0
i58.0


1,133
1,214
65
514
152
143
200
1,334
237
555
6,187


628
1,4,99
704
464
1
178
217
591
22
923
5,227


1,000 :1,000 :1,000 :1,000: :1,000 :1,000
bales :bales :boles :bales: Per- :bales :b.les :
478 lb.:478 1b.:478 lb.:4781b: cent :478 lb.:478 lb.:


232 19 6.5
334 1,821 474.2
332 712 214.5
252 536 212.7
16 268 1 75.0
84 200 238.1
191 352 184.3
818 838 102.4
82 402 490.2
556 773 117.8
3,107 5,921 190.6
1,000 : 1,000:
Per-
bales :bales:


478 lb.:478 b: cent


ted Kingdom : 35 38 41 92 224.4 481 510 503 598 118.9
nce ......: 14 15 19 34 178.9 179 211 168 314 186.9
ted States .: 5 2 5 7 140.0 84 34 32 54 168.8
many 2/ ....: 11 18 21 O --- 134 1E3 175 12 6.9
ly .........: 7 10 5 5 100.0 100 102 96 95 99.0
an .........: 6 5 14 6 42.9 96 72 134 135 100.7
tish India .: 7 12 5 12 240.0 64 121 76 115 151.3
.er countries: 25 33 35 19 54.3 286 328 338 254 75.1
Total ......: 110 135 li5 17E 120.7 ] ,424 ,'6C1 1,522 1,577 103.6


Compiled from official sources.
1 Less than 500 bales.
Includes Austria beginning Jonuary 1938.
Not available by countries.

Exports for the 10 months, A,;_ust through :ay, totaled 5,921,000 bales, or
.1 percent more thjnm the very small export:; in this ;criod last season, about 10
percent more thma in the corresponding period of 1937-68, but somewhat less then
the 10-year (1929-38) aver:--e for thuso 10 months. Thu 10 months' exports to the
.tited Kingdom totaled 1,821,000 bales, and exc.oedd exports for th.- corrospondinm
periodd last season by 374 percent. J'iprn w:s th' next rl re-rt export mrrKxet during
.t hig period, shipments to that country totaling 838,000 b-.le or just slightly more
Than in thu same months last s. Ason. The 712,000 b-'les exported to Frnce and the
416,000 bales to Italy were a little more th-n twice as large as exports to those
I !I


7 -

Cotton: Exports from specified countries, average 1928-29
to 1937-38, and seasons 1967-38 to date


- '----~ 'I


--


*





CS-44


countries from August through May 1938-39. Compared with the 10-year average,
there was a loss in exports to Germany of more than 1,100,000 bales. This,
however, was largely offset by larger than average exports to the United King-
dom, France, Italy, China, Spain and a few other countries.

The outlook for exports during the months ir-ediately ahead appears to
have become less and less favorable during recent weeks. Aince early May the%
cotton mills of Belgium, Holland, and, more recently, Fran. and Italy, have
been lost as export markets for American-and most other co- ton for an indef-
inite period. In each of the two p;st seasons mills in th se 4 countries have
consumed approximately 2-1/2 million bales of cotton, of wl ich 1 to 1-1/2
million boles were American cotton. These mills, together rith those in areas
previously under German control, consumed a total of about i-3/4 million bales ::
in each of the two seasons, 1937-38 and 1938-39, of which 1 9 to 2.'3 million
bales were American.

Exports of Egyptian cotton up 20 percent
in May, 4 percent for 10 months

With exports from Egypt to France, the United Kingdom, and British
India from 1-4/5 to 2-2/5 times as large in May this year as in May 1939, the
total to all countries exceeded May 1939 by 21 percent. Since exports in May
last year were unusually large, the total for last month was the largest for
any May on record and two-thirds larger than the 10-ycar (1929-38) May average.

The exceptionally large May exports brought the 10 months' total to all
countries to nearly 4 percent above the total for the corresponding months last:-
season and slightly above that for the first 10 months of 1937-38. The total
of 1,577,000 bales (478-pound basis) exported during the first 10 months of the
current season was the highest for this period since 1936-37.

DEMAND AND COITSU TTTION

UNITED STATES: Decline in mill activity h.'dlted; upturn expected

The 636,000-bale consumption of all cotton by domestic mills in May was
slightly larger then h,-d been expected. As a result, the May index of cotton
consumption adjusted for seasonal variations was somewhat higher than for April
(116 compared with 113), thus bringing to a halt, at least temporarily, the
sharp decline which began last December. Some of the weekly indexes of cotton:1
mill activity had indicated that May would be lower than April. The index for":
May this ye-r w-ts 6 points higher than for M ,y last year.

Manufacturers' sales of cotton textil?.s for the week ended June 15 wer
reported as the largest since last September rund, according to the New York
Cotton Exchange Service, :ere equal to 4 to 5 weeks' production. Consequent l
the stDtistical position of manufacturers has been improved materially. Thi*
and the further improvement in domestic business activity, employment, and
consuncr incomes which is expected--prrtly as the result of the large Federdia
expenditures for armiments--have improved the outlook for domestic cotton


- 8 -





CS-44


consumption, It now reers unlikely +that consumption in June and July will
decline more than the usual seasonal amount and may decline less than
seasonally.

The seasonally adjusted index of consumption therefore may remain about
unchanged or increase suoewhat compared with May, Should industrial production
and general business conditions experience an additional rise, as now seems
likely, the pick-up in domestic cotton miili activity may be extended well into
the 1940-41 season. It would appear that anticipation of some such development
as this is one of the f-ctors contributing to the recent strength in domestic
cotton prices in the face of the inoreasi.ngy less favorable export outlook.

Total domestic mill consumption frol August through May of 6,591,000
bales was 15 percent larger than in the first 10 months of last season and less
than 100,000 bales below the record high consumption for these 10 months esta-
blished in 1936-37.

EUROPE:

With the spread of wFar during recent wceks the outlook for cotton con-
sumption in Europe has been less and less favorable. This is due not only to
the disruption of cotton mill activity in the combat areas but also to the
fact that important aroes have recently been cut off from outside sources of
raw material for an indefinite period. If tne British arc able to make it
difficult, if not impossible, for the ar-es now under Germn and Italian con-
trol to obtain cotton from thp potential cotton-exportirg countries of the
world, cotton mill consumption in this large portion of EuroDp will be greatly
restricted during the months inmodi.tely head. As previously indicated, the
mills in the areas now under German rnd Itali.n control cons" -i.- about 4-3/4
million bales of cotton in each of the' seasons 1937-38 end 12 ,4-39. Mill con-
sumption in this .rl-n has been running considerably lo:'.- so fhr this season
than last season, .on account of the shortage of cotton in Crr-uiy, Poland, and
Czechoslov-.kia. Should the entire area. of German and Ita-li'n industry remain
largely blockaded for most of the coming season, mill consui-ti'm.n would be
confined largely to stocks on hand in the ara. at the beginni..ig of the season,
If so, conrumpntic- w'.oulu be equ-al to only a small proportion of th. quantity
used this ...nson rnd would be still smr~ller in comparison with consumption for
the seasons just pr...coding the beginning of the wcr.

Trade reports indic.ote that in Gr,-ant Britein cotton mill activity in-
creased in the e nrly prrt of JurnI and is no,'m running at exceptionally high
levels. Altnough mr.nuf'ctur.,:rs' salcs of cotton goods for d.u&istic and foreign
civilian t.-ni.e wv-re- npp-'rntlyi- relut+ivEly s.nall, s'les to thi British Govern-
ment were I. rnrtL i rs critinuinut larue. In I early Junr the Fre:.ch rcvv..-rnment
is said to l'Lve p]'iced ].rge orders with Pritish mills as a r-sult of thi loss
of Fr-ench mills to the G,;rmans. Now many of these orders may n-evcr be filled,
but may be t-~ken over by the British Gov.-rnmmnt. During the 4 weeks ended
June 14, forwvrdings of cotton to British mills totaled 250,000 bales compared
with 216,000 bal.:s in the corresponding wei-ks lrtst year. Thuse forwxnrdings in-
cluded 122,000 bales of American cotton this yenr compared with 62,000 in the
same weeks of 1939.


- 9 -





CS-44


- 10 -


ORIENT; Cotton consumption slightly lower in
IMay compared with April or with MayV 1959


UNIVERSITY OF FLORIDA
3 ll 08BO ll Illll III IIIIIII11111
3 1262 08900 4006
:i~d i.


Cotton mill activity in China, including Manchuria, during MaY' B.. :i
reported to have remained about unchanged compared with April. Total
consumption for the month is estimated at around 140,000 bales. Thid
about the same as in May last year. In Shanghai, Japanese, Chinese, -
British mills were all reported to have been operating at near 100
capacity and the mills in Tientsin at about 50 percent because of sait! i:B
raw materials. The spinning industry in Manchuria is reported to ha.se ii
to reduce operating rates from 36 percent to 16 percent of capacity,,.b.
June 1.

According to the New York Cotton Exchange Service, cotton mill ai-
India consumed about 10 percent less Indian cotton during May than sl May
last year. For the 10 months, August through May, consumption of those. mill00a "1,
was estimated at 2,409,400 pound bales compared with 2,591,000 during the SAti
period last season. .

ACREAGE, PRODUCTION, STOCKS r:ND SUPPLIES .

Japanese Government to continue efforts
to stimulate cotton production in China

Despite the discouraging result so far obtained, the Japane;Wse p .M.t..
making unrelenting efforts towards increasing cotton production in Wh e :
area of China, according to F. recent radiogram from the office of t1i.,
Agricultural Attache at Shanghai. These efforts are designed to ea.i s*e
Japan's dependence upon supplies from other countries, especially t in ait
States and British India. The Japanese Cotton Cultivating Associ1at 4i, fli
ported to have decided to appropriate 1.7 million yen for encoura
duction expansion in North and Central China this year, with the ui 6
jective of gradually enl urging production to 4 million bales after s Nt
years of subsidization. This year government allotments in Kwangt .11.:61.0:
Territory and Manchuria for the expansion oi' cotton production are .1 o. .
total 1.5 million yen. ,

According to this message the 1940 total Chinese crop is stll>,
to be considerably Ir.rger than the rel-.tively small 1939 orop. But
received up to early June indicatted a 1940 cotton crop in North China -.
than last year's small crop. This is said to be due to unfavorable .'imli .
planting over a large part of the area, poorer preparation of landij** "
lack of favorable returns from the previous crop nnd the importance ",4,.iI.".'.:' ...l
sufficiency in food crops this yesr.

The weather in important producing regions in lower Yangte x) I
been dry. Cotton cultivation in Hupeh Province must have been affqr:
intensive military operations in that area since the planting seal
significant changes in crop prospects have been reported from other
China. In Manchuria the Government planned to increase the 1940 p.
about 30,000 bales of 478 pounds over last yc:'.r's harvest but reality
plan seems unlikely because of unsuitable weather, shortage of..fert
farmers' dislike for official control.




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