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:
AA00013000:00025

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World cotton prospects
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World cotton prospects
Succeeded by:
Cotton and wool situation
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Wool situation
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Wool situation
Succeeded by:
Cotton and wool situation
Related Items:
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Full Text




^3G.4b b 5
.TUIT2 STA-TES D 7.'.1T: IIT OF AG2ICULTLTE
Bureau of Agricultural Econo;.tics
'7as'iin-ton

CS-5 "arch 3C, 1937
L lNIV Op ;L L!
I OGLu^TS JP-__. -----------------------

S-------------------------------------
WE.E COTTON SITUATION


S OSITORY ST ",A'Y

A ver' re.-id rise in snot cotton -rices bec.:-n a.t the end of Febra,-r,.

Fron a Februmry avcre-e of 12.90 cents, the 10-n.rl-et -rice rose to 14.42 cents

in the reek ene.ed lLarch 20. The letter -:as the hi host Lvcr-rc -:rico for any

week since the wcok onded June 7, 1930.

The receipt of requests for the release of '--roximD-tel: 973,000 blces

Govermnent-financed cotton u. to M.arch 25 inc.icc.tes the *-rob-bility that while

stocks of "free" cotton in the United St-tes :t the enc' of the 'resont scson

will be smaller than in any recent season, with the exception of last year,

they may be sli.htl: lparer than averv.o stocks in this country during the Inst

half of the 1920s.

Hill activity and cotton consur'tion in the United States continueC. at

a record breeckinr level during FebruCry. Consun-tion in the 7 months s front

Au:ust through Februrry was 28 -ercent r.ore than in the corresnonling -crioc.

a yenr earlier.

In forei-n countries, especially' in Japan, Chinn nr.' the Unitec! Xir.;L.omi,

total utilization of raw cotton a.nd output of cotton textiles are extrelel:' hich.

In those three countries and in foreign countries p.s a whole, .icrever, i..orts

and xanrent consumption of A:.eric-n cotton .were bout 15 -ercent 'l-or in the

6 months An.ust throu- h January 1937 than in the correPsonin:- crieod ar year

earlier.

I







- 2 -


The total -.'orld consurmtion of all cottons -7-.s 8 percentt larger than

in the first h-lf of l.st season. The !er:vy consurtion by mills in the United

States ..lore th-n offset thle Occrcoseod consuntion of A.ieric'n in foreign

countries, -nd v-orld consui.tion of Anericrn cotton in the first G months

of this season sho-ed -.n increase of ..,ore thnn 300,000 bales, or 5 -ercent,

over the corres-;ondiin: -'eriod last y.'ear. Total :.ill consui.ation of cotton

in forcing countries vas 10,527,000 ba.les front Auiust throu."h January of this

season, an increase of bct-een 2 and 3 -ercent over l?.st year and of 21 per-

cent over the nvern.e for the 10 years ended 1932-33. This hih level of

cons-..-ation resulted from the record hi. h -vorld utilization of foreir-. cotton

mostlyy 1ll consumed. in foreign countries), which was 11 percent more than

in the first half of 1935-33 and 58 percent more than the 10-year average.

World consur.mticn of Indian cotton was 7 .ercont more than last season and

8 -ercent above the 10-year avcrare. '.orld consurmtion of Egyptian was

sli htly lar er than in the first half of 1935-33 and was a record hi.h.

The consun--tion of sun.lry cottons vws 15 -nercent above the corresponding

period a year earlier anc. 118 -:ercent .:ore than the 10-year evera.e.


Do-.estic Prices Fise Sharnly

The -rice of M;iddlin, 7/3" cotton ?t the 10 markets averaged 12.90 cents
in February, the `.i-hest February rvera.'e since the corres-ondinc ronth of
1930. About the end of the ,.ionth, h:orever, a very rar:id rise bean -:hich carried
the 10-: .rket pverr-e to 13.57 cents in the rreek ended larch G, to 14.05 cents
in the week: ended I'nrch 13, and to 14.42 cents in the weel ended :larch 20. The
letter was the highest vvern-e -.rice for any week since the week ended June 7,
1930. Several ii.nort.nt factors have contributed to the advance in cotton
prices. First, cotton consun-"tion and nill activity in the United States have
continued at hi."-h levels. Second, ex-orts during : February and the first part
of I-.rch were sli:htlyr larger than a year earlier, whereas in the first half
of the season they were running ; considerably below the corresponding months a
yenr earlier. Third, the su--'ly of cotton in trade channels in the United States
is mlterially s.:,aller than in any recent year with the exce-tion of last season


CS-5





CS-5


and, according to the New York Cotton Exchange Service, a considerable part
of the extra nJill stock of "free" cotton in the United States is rather un-
attractive to domestic spinners, because of location and quality, or because
the boles have been co:mressed to high density for export. It is al-so reported
thklt the supply of cotton actually available for sale is somewhat smaller than
appears to be the case because of an unusually large forward sale by shippers
for shipmt.:nts during the rer.ninder of the season. Fourth, the release of
Govern-ent-fInanced cotton since January 1 has been, perhaps, more of a nrice-
strengthening than a price-weakening f.ctor. while the supply of "free"
cotton has been -.u.-.ented, the unexpectedly large quanticy released in the
face of the stiff terms imposed by the Cornodity Credit Corporaticn i.Trressed
the trade with the strength ur-nerlying the market and. has tended to stimula.te
further the market for spot cotton. Finally, cotton prices undoubtedly have
been affected to so..'e extent by the recent strength in raw material prices
since January which has reflected the upward trend in world industrial pro-
duction and ti:e continued heavy, and anticipated heavier, expenditures by
certain foreir-n countries for an aments.

The -rices of forei.nm cotton at Liverpool, expressed as a percentage
of Anerican, did not show ?ny ir.-ortant changes in February nor in the first
3 weeks of 1March cor.pared with January. Enyptinn, Brazilian n'. Peruvian,
especially Peruvian, strengthened somewhat relative to Anerican liid2lin,,
while the average price of three types of Indian weakened as coMpared '-ith
two types of American. 'Jith the exception of Indipn, -rices of fore-i".n cotton
increased as :.2uch or .'.ore than Am.ericp.n during the --eriod of swiftly rising
prices in the first helf of the nonth.


C bst-ntia.l Qu.ntity of Government-Financed C..gtor. 'oves Irnto Trade
Channels

The Commodity Credit Corporation has announced thrt up to and including
i.arch 25 requests for releases totalin: 973,000 bales of lonn cotton hrd been
received. This is a considerably larger quantity thnr. the trade had expected
would be released duri-.. the entire periodd from Febr 'ry 1 to April 1. The
Conmodity Crudit Co-nora.tior's selling terms 'rovicde that the release prices
on any r:iven c.y are to be based on the 10-n--rket avora'e prices for "'iddlinc
spot on the previnur ,,v. S.-.les of loAn cotton u7 to the -.rese.t tir-o have
undoubtedly been greatly stimulated by the fact thrt the n.ret has been ad-
vancinC .ost of the time.

Assu-..in- that do;iestic consun-'tion plus exrcrts for the entire season
will bear the snn~e relation to the totpl for l1st year th-t consu-rtion and
exports so f this season bore to those of the rorres'one-inr- r.:cnths 1.st year,
total dor.estic consurn-tion plus exports for the 1932-37 season will enount to
more than 1I,jCC,000 bales. The carry-over in the United States on Au-ust 1
would be about 4,500,000 bales. If it is assumed that arpproxiT.-tely 1,300,000
bales of loan-stock cotton are released under the -resent plnn, the o-eration
of 'ihich is scheduled to end on April 1, and if it is further ,- -ied that no
additional quantities of loan cotton are released, the stock of "fr n" cotton
in the United States on Awaust 1 would amount to about 2,800B,0O bilo., This


- i -





CS-5


/4
- _


a
woulF be considerably smaller stock of "free" cotton than has existed on the
corros'ohL.in date in nnv recent year, with the exce-tion of last season, but
it is sli.-h.ly 1cr-rer than the everar-e carry-over in the United States in the
5 years ended Au.ust 1, 1929. In the 5 years ended 1929-30, however, con-
sumntion plus exports of Arierican cotton averaged about 15,000,000 bnles or
about 2,000,000 bales .-ore than the anticipated total for this sr' son.

According to the International Federation of Master Cotton Sminners' and
'Manufacturers' Associations, world r.ill stocks of all kinds of cotton on
Febru.ary 1--5,891,000 bles---were 1,000,000 b-les or 21 percent -r,-er than
on February 1 last year. About one-thir. of this increase took .lace in
forei-n countries and about two-thirds occurred in the United States. Col.poring
February 1, 1937, ,-ith Au.ust 1, 1935, there vas a co:npratively smnll increase
in .mill stocks in forei.-n countries, but a rise of about 1,200,000 bales in
mill stocks in the United States.

..orld nill stocks of A-merican cotton on February 1 -ere 500,000 bales
lar-er than on February 1 last year and sli.:htly lrrer than February 1 stocks
during the 10 years ended 1932-33.

.:ill stocks of A.-;cric. n cotton in forei-n countries on February 1 v:ore
12 percent less than r o the corresnondin- date last year and 33 -ercent less
thn the 10-yrer averr::e. The, -:-ere not -,prticularly s:.i'll, ho,-ever, in view
of the lower level of forei-n consur.r'tion of Arcrican cotton this season as
co.m-red. with lost year and vith the 10-year aver- e. I"ill stocks of foreign
cotton, especially Sundries, on February 1 were rore than tvice as lar.re as
in the 10 years ended 1932-33, but 'vere not out of line vith the increased
consurmtion of this cotton by foreign nills. (See table at end of the report.)


Zr->:rs front U:iited. States Irnrove Exoorts from India and Eryot
Ver:' L-r:.e

Sxmorts cf Am-erican cotton in February were 422,500 bales .r 14 -ercent
lar cr than in February 193G. ::ost of the increase resulted fro- larger exports
to the United KCin-do.- and to Japan, especially the latter. Exports to France,
Italy an'. Ger.r.ny were smaller than in February 1933. Exports i. the 7 -.tonths
from Au ust through Februi.ry were 3,898,000 bales or 12 percent less than in
the corresponding period P ear earlier.

ihile the ir.nrove:.ent in exorts in the first nart of 1937 over 1935
is a hopeful sian, it should not "ive rise to Irinue Ontimis'i. According to the
NewI York Cotter. Exchange Service, foror.-rdinfs of A-ierican cotton to foreign
nills in the 4 weeks ended :arch 13 totaled only 423,000 bales co.nared .rith
531,000 a year earlier. Furthermore, stocks of American cotton afloat to foreign
countries and at forcif-n ports about i'arch 15 were 101,000 bales larger than a
year earlier. These facts su, C:est the possibility thit the recent increase in
exports !.ny be short liloa.




cs-5 5-

The 514,000 bales of cotton exported from India in January were 82
percent larger than last season and 4' percent above the January average
in the 10 years ended 1932-33. This was the largest amount exported from
India in any January on record and, with the exception of March 1925 and
February 1926, was a record high for any nonth. For the most part this very
large volume of exports resulted from the extremely heavy ship:,onts to Japan
which were 21 times as large as in the corresponding month a year earlier and
were the largest ship-ents of cotton from India to Japan in any nonth on
record. Exports frou India to all countries of 1,458,700 balas in the 6 months
August through January were the largest for any corresponding period since
1930-31.

Exports of cotton from Egypt in February were 213,600 bales of approxi-
nately 478 pounds net and were the largest exports for any February since 1914.
In February 1936, exports from Egypt to all countries totaled 126,800 bales
and in the 10 years ended 1932-33, 133,400 bales. Exports of 1,266,100 bales
in the 7-month period ended February were a record high for the period, being
9 percent greater than shipments of 1,164,600 bales last season and 31 percent
above the 10-year average of 960,300 bales. whilee exports to all important
countries so far this season have been larger than the average for the period
1923-24 to 1932-33, they have been especially large to Japan. Shipments to
Japan were 171,800 bales compared with 73,100 in the sa-e 7 months last
season and thu 10-year average of 44,000 bales.


The Tax ile Situation

World consumption of cotton at record high level foreign
aill consumption of American small

According to consumption data recently reported by the International
Federation of Master Cotton Spinners' and Manufacturers' Associations, world
mill consumption of cotton in the 6 months ended January 31, 1937, amounted
to 14,375,000 bales, _/ a larger consumption of all cotton than in any corre-
sponding period on record. It is nearly 1,100,000 bales or 8 percent more
than in the saro 6 months last season and 2,600,000 bales or 22 percent more
than average consumption during the first half of the 10 sLasons 1923-24 to
1932-33.

World utilization of American cotton fro:.. August through January of this
season amounted to 6,509,000 bales compared with 6,101,00- bales in the corre-
sponding period in 1935-36 and 6,747,000 in the 10 years endcd 1932-33. The
increase compared with last season is due entirely to the very largo consumption
in the United States. Consumption of .umorican in foreign countries amounted
to only 2,742,000 bales, 15 percent less than last year and 27 percent less
than the average for the 10 years 1923-24 to 1932-33. The quantity of American
cotton used by nills in foreign countries in the first half of this season was
the si.allest since 1923-24 when foreign ..ills used 2,700,C00 bnles or slightly
more than this year. Total consu-med in forLign r.ills, howuvcr, increased 50
percent front 1923-24 so that thu proportion of A..uric.n to the total w-s quito
different, averaging 44 percent for thu 10 acasons ended 12-1 1 percent
in 1935-26j and 26 percent this season. (CSe tablo .t end of th. report.)
j7/ nerioan and Srundrios in running balos; I'di-n ar.d Egypt l:n, running balos
converted to bales of approximately 473 pounds nut by :.uliplyir.g by 0.6 and
1.5 respectively. (Soc t-iblI at end of report.)







- 6 -


World mill consumption of foreign cotton, nost of which takes place in
foreign countries, was much larger during the 6 months from August through
January than in any corresponding period on record. In the first half of the
10 seasons ended 1932-33, world nill consumption of foreign cotton averaged
a little more than 5,000,000 bales. In 1935-36 it amounted to nearly
7,100,000 bales and in the first half of the present season (August to January)
to nearly 7,903,000 bales or 58 percent more than the 10-year average. Con-
sumption of all three major divisions of foreign cotton, Indian, Egyptian,
and sundry growths, has been very heavy so far this year. World utilization
of Indian cotton of 2,363,000 bales was 7 percent larger than in the first
6 months of 1935-36 and 8 percent higher than the 10-year average. World
consumption of Egyptian cotton amounted to 883,r00 bales. This was slightly
larger than consumption in the corresponding period last season and was a
record high (consumption by 6-month periods available since 1923-24.)

World ::ill consumption of sundries shows the most pronounced growth.
In the first half of this year mill consumption of these growths totaled
4,620,000 bales, or 15 percent greater than last season and 118 percent larger
than the 10-year average. In the 10 years ended 1932-33., the consumption of
sundry growths by foreign mills was equivalent to 57 percent of their con-
sumption of American and represented about 25 percent of their consumption of
all kinds of cotton. So far this season, the quantity of sundries consumed by
foreign mills amounted to about li tinos foreign consumption of American and
represented approximately 40 percent of foreign consumption of all kinds of
cotton.

Domestic consumption continues at record levels

Mill activity and cotton consumption in the United States have continued
at exceptionally high levels. In February, domestic mills used 664,000 bales
of cotton or 29 percent more than in February 1936. This was a record high
consumption for the month. Consumption in the 7 months ended February amounted
to 4,513,900 bales, nearly 1,000,000 bales or 28 percent more than in the
corresponding period a year earlier. During most of the month of February,
mill sales of goods lagged behind mill output but activity was well maintained
on the basis of old orders. Early in March, a new wave of buying set in, and
during the first half of the month sales were apparently in excess of current
output. The continuation of the very large volume of unfilled orders makes it
seem likely that activity will stay well up around present levels for at
least the next few months. Mill margins (based on 17 constructions of grey
cloth) averaged 17.86 cents in February, a slight decline from January's 18.22
cents, but with that exception wore the highest average monthly margins for
any month since October 1925. In the first 3 wocks of March an advance on cloth
prices kept margins comparatively high in spite of the sharp increase in raw
cotton prices. Margins in the first 3 weeks of the month averaged 17.69 cents.


CS-5




-7-


Imports arnd consumption o' all kinds of cotton by European Countries
very_ large in first half of present season 1/

United Kingdom. British uill takings of raw cotton so far this season
foreshadow the largest year's business in a decade, yet American cotton is not
sharing in this striking trade recovery. The takings of American cotton to
date are the lowest in many years, except for the two very unfavorable seasons
1930-31 and 1934-35, but the heavy movement of other growths, notably Brazilian
and Indian, has carried total takings to levels well above even the high
figures for the first half of last season. These developments are attributable
to keen demand in the United States, large supplies of co.-petitive cotton, and
resultant adverse price relationships for ..nerican staples.

During the six months August through January, total imports of
i,753,000 bales of 478 pounds net were 6.4 percent higher than a year ago and
the largest in several years. Imports from the United States, however, were
less than last year, and, omitting long staple cotton, if any, were only
737,000 bales a decrease of 17 percent. On a weiLht basis, .American cotton
constituted only 42 p~,cent of th3 total 6 monthss imports as com-pared with
54 percent a year iqo.

.\ striking development in imports was the sharp rise in takings of
short and medium staple cotton. Imports of short and omdium staple cotton
from India amounted to 164,000 standard bales, or 40 percent :more than a year
ago. The proportion of short staple cotton from India was higher than last
year. Imports of Brazilian cotton of Liedium staple were 162,000 standard
bales, an increase of 169 percent. From Egypt, iiaports of long staple decreased
12 percent, but imports of riedium staple increased 30 percent, bringing each
of these fiFures 'o about 183,000 bales. The net result was that total imports
of short :-'. le cotton (costly frou India) increased 31 percent and medium
staple cotton 8 percent, while long staple cotton decreased 9 percent.

Cotton cloth sales appear to have slackened somewhat during February,
although the inquiry for goods is being well maintained. The home :..zrket
continues strong and complaint is still heard of the inability of buy:.rs to
obtain early delivery on new orders. In the export trade, however, new
business is said to be generally for smaller lots than was usual a few weeks
ago. There nevertheless appears to be enough business on the books to keep
looms well occupied for several months ahead, and spinners find little
difficulty in booking erw orders for nediuL and coarsn yarns, especially wtrp
styles. Some idl- machinery has been started, and projects are krcr:n to be
under considcerqtinn for resumption of operations in mills .v'hich have been
closed fcr so..o tir.i.

err x.ny. Both German imports and aill consumption of nrw cCLIton fell
off during the first half of the 1936-37 cotton year. The drop in i:..corts
was very heavy a iountir- to only 69 percent of those of a ye-r L'2rlier, Net
imports .n the 6 ronth- oncl.n January 31 amounted to only 502,200 bilts of
478 pounds against 72o,200 bales of 473 pounds in the si;.:e pt-riod in 1935-36,
380,000 b-.les in 1934-35, 812,000 in 1933-34 and an avo. age cf L'2, 00C in the
5 yuars 1926--" to 1:j:-31.

1/ Prepared I .rgely frou a ruort fro..; Agriculturnl Attache loyd V.Str'vro
at Berlin.




CS-5


Mill consumption of raw cotton during the half-year also has declined,
but to a less extent than have imports because of two reasons. First,
there was a further reduction in inland stocks, and secondly, German re-
exports of raw cotton from within customs boundaries have fallen to very
negligible 'nounta

The decline in total mill consumption of raw cotton in the half
year ended January 31, 1937, compared with this 6-month period in the 2
previous years, has taken the form of a further drastic curtailment in
the utilization of American cotton. Only 19 percent of total uerman raw
cotton imports came from the United States during that period, compared
with 33 percent a year earlier, 43 percent 2 years ago, and 79 percent in
-the first half of 1932-33. The effects of the German currency situation
and the relatively high price of American cotton in relation to other
growths, have thus combined to reduce mill takings of American cotton,
or rather to reduce purchase permits by the Supervisory Office, to a
record low. Conversely, the utilization of cottons was driven up, for
the rnme reasons, to a record high, and is estimated to nave reached 56
percent of total consumption in the first half of the present season, as
against. only 2 percent in the first half of 1928-29.

The fact, however, that total mill consumption of raw cotton by
German spinners in the first half of the current season was the lowest
recorded since the y-.-t-war stabilization-of the Rcichsmark, with the ex-
ception of the crisis hal..-year ended January 31, 1931, is very misleading
in me important respect. It does not mean that cotton mill activity has
shown a corrpspondin- decline. On the contrary, German mills have heen
in a position to maintain activity and output on high levels through
greatl- increased utilization of substitute spinning materials. It may
be Pstim.:t. tnat in the first half of 1936-37 spinners consumed almost
300,000 l-air of such materials, compared with only about 100,000 in the
first half of 1932-33.

Estimated total cotton mill consumption of spinning material,
-932-33 to 1936-37


Spinning material Half-years, Aug-Jon.
:1932-33 :1933-34 :1934-35 :1935-36 :1936-37
: 1,00C 1,0C0 1,r'O 1,000 1,x'0
:bales bales bales bales bales

Raw cotton ..............: 576 745 578 610 562
Imported cotton waste,etc.: 40 20 106 60 97
Staple fiber .............: 2n 25 30 52 79
Domestically reclaimed ...: 50 69 60 90 10C
(cc ton,etc) ____
Total ._.......... ... .686__ 850 774 812 838
Eales of 478 pounds.






- 9 -


A comparison of the replacement of American cotton in the first
half of 1936-37 as against the first half of 1933-34, when total mill
consumption figures for spinning material were about equal, gives the
following picture:

German mill consumption of cotton by growths, and other
spinning materials, 1933-34 and 1936-37


: :
: Ameri-:Indian :Egyp-
: can : tian
: : :


:Sun-
dries


: :Import-:
:Total : ed :Sta-ple
:cotton:waste, :fiber
: etc. :


:Lomesti-
:cally re-
:claimed
: cotton


:1,900 1,000 1,000 1,00C 1,000 1,COC 1,0CO 1,COC
:bales bales bales bales bales bales bales bales

1933-34 : 543 70 93 39 745 20 25 6C
1936-37 : 97 72 73 320 512 97 79 1CC
Plus or :
minus -446 + 2 -20 +281 -183 -77 +54 +4C

Bales of 478 pounds.

It may be said, therefore, that of a total displacement of 446,000
bales of American, about 65 percent was replaced by the substitution of
exotic cottons, 25 percent by the substitution of imported cotton waste,
etc., and domestically reclaimed cotton (from rags, etc.), but only about
10 percent by the substitution of staple fibers. The major factor in the
reduction of German mill consumption of American cotton is thus seen to
have been the increased utilization of exotic or sundries cottons, though
the use of substitute spinning materials also has been of great importance.
Exotic cotton, as well as most of the substitute imports of cotton waste,
etc., have been available to Germany under bilateral trade agreements.

Although actual figures are not published, mill stocks of raw cotton
are estimated to have fallen to about 100,000 bales of 478 pounds on
January 31, 1937, compared with an estimated 200,000 bales on Janu.ry 31
last year. Total inland stocks of raw cotton may be estimated tn have
developed as follows:


Location


: Join. 31
S 1933 : 1934 : 1935 : 193F : 1937
: 1,000 1,000 1,00 1, 0 iI .C
: bles bales bales ba.les b ces


Mill stocks ..............:
Other inland stocks ......:
Total stocks ...........:


172 261
196 233
368 494


140
200
340


21i 165
2F5.


Bales of 478 pounds.


Half-
years
Aug.-
Jan.


CS-5








Czecho slov-akia.-
SF-V1-i- occupation and output in the Czechoslovakinn cotton textile
industry under oted.ly Ih?ve benefited from the substantial revival in general
economic conditions evident in 1936, even though gains in exports of yarns
.nd fabrics hve so far been rather moderate. A strong rise in prices
of cotton manufactures, partly incident to devaluation, is complained of
by the trade, and, after a period of active export selling, Czech cotton
textile export prices are now spoken of as somewhat out of line.

The Czech foreign trade figures for cotton in 1936 show good irm-
provements over 1935. Imports of raw cotton and exports of cotton yarns
in 1936 were higher than in 1935 because of improvement in the first half
of the year; but in the second half of 1936, returns were again lower than
in the second half of 1935. Exports rf fabrics in 1936 were only slightly
above 1935, and it is significant to note that exports of cotton f-.brics,
calculated on a weight basis, are now only about half as large as y:.rn
exports, whereas, the relationship used to be about the reverse prior to
1929.

Austria.- Favorable developments in the Austrian cotton textile
situation have persisted until recently, despite occasional recessions in
the yprn export business to Rumania. Mill activity in both spinning .nd
weaving plants has remained relatively high, though, on the whole, some-
what below the comparable perio' of last year, and it is said that the
winter business of the industry has not been as good as last year.

The recent formation of a weavers' cartel in Austria is being
sharply criticized. FPices of cotton fabrics have been raised 18 to 35
percent with an indic-.te averagee of 30 to 32 percent. Weavers claim that
they have been forced to the.e measures by the yarn prices demanded by the
spinners' cartel. Proponents of consumer interests urge a loosening of
import rc;triction:- a-. the reduction of import tariffs on yarns and
fabrics. In any event the sale of cotton goods in Austria and, therefore,
mill occupatioQ seem almost certain to be unfavorably affected by these
price increases.

The figures on Austrian foreign trade in cotton and cotton goods
in 1936 are inco. .raging. Considerably higher imports of raw cotton than
in 19.35 have coincided ri nh considerably higher exports of yarn, though
in both cases the rise over 1935 was much more marked in the first half
than in the second half of the year. Nevertheless, net imports of raw
cotton in the half year ended January 31 were nearly as large -s the
record imports in the corresponding period last season, and were 62 percent
larger then net imports in the year 1929-30 to 1930-31.

Pol- nd.- Polish imports of raw cotton so far this season (August-
Lecember 1936) have amounted to 132,000 bales of 478 pounds or only slightly
bdow the 136,000 brles in the same period last year. Mill activity also
shows a slight drop from last year's early season figures, but the general
level of occupation is well above the corresrnnding period in the critical
seasons 1931-32 and 1332-33.


CS-5


- it -






CS-5


France.- The French cotton textile industry has played an important
part in the favorable turn which economic conditions took in France in
1936. Occupation of both.spinning and weaving mills has risen appreciably
during the ye-r; stocks on hand in the mills have declined, and unfilled
orders have soared. Many mills are sold out for several months aheAd,
some in Normandy even to the end of 1937.

True, much of this reviv-l has been speculative, or at least of an
advancee buying" character, in the face of currency devaluation, w-.ge
increases and substantial rises in prices. But the refilling of goods
stocks in tr-.de channels has long been overdue and need not result in a
prolonged buying holiday later, since larger stocks will be required with
an all-round speeding up in general economic activity. In view of the
improvement in general business in Frnce there is every reason to view
with confidence the underlying outlook for tne cotton industry, though a
temporary reaction in business is not altogether improbLble. The intro-
duction of the 40-hour week in the textile mills at the beginning of 1937
cannot but tend to bring about some temporary recession in cotton con-
sumption and mill output. The further increase in prices which followed
upon that measure the wages formerly paid for/48-hour week are now being
paid for 40 hours may well cause, also, some pause in buying, yet these
do not seriously impair the general outlook.

French imports of raw cotton continue to show a steady rising
tendency, compared with similar periods in recent years, total trkings
in August-December 1936 amounting to 526,000 bales against 460,0C0 "nd
380,000 bales, respectively, in the snne period of 1934 and 1935. Imports,
however, are still much below the average of 743,COO balos in August-
December 1926-27 to 1930-31.
l/
Italy.- In the absence of any official statistics on raw cotton
imports (as well as on consumption) by Italy in 1936, reliance must be on
rough approximations calculated by deducting estim-.ted shipments in
transit to other countries from total estimated arriv:.ls of rr.-. cotton
in Italy. The balance gives some indic-.tion of whr.t the country's retained
raw cotton imports have been.

Slightly more than 500,000 bales (including linters to the extent of
about 10 percent) are obtained by this method for Italy's imports of cotton
in 1936. nmerican cotton comprised about 66 percent of the total cotton
shipments -.ssumeA to have been retained in Italy in 1936, Egyptian cotton
around 13 percent, r-ad Indian cotton about 9 percent. Of tne rc.mainiag
12 percent a large part undoubtedly consisted of Brazilian auni Argentine
cotton. From a comparison with official import data for 1935 it wouldd
appear that tot4a 1936 cotton and linters imports by Italy weure about 25
percent blow the already much reduced importation of 1935. In prst Ood
years Itrly used to import around one million b.lec.

Estimated cotton imports in the half-yer.r Aa-ast-Juru: ry 19-6-37,
were 270,0')00 bales of 478 pounds, of which 54 percent or 145,? '::'re
Americ-n, 15 percent or 40,000 brles Indin, 19 percent or 51,CLC, -ies
Egyptian, r.nd 12 percent or 34,Cl;0 b-les .uindrics cotton, l:.rgely Brnzilircn.

I/ Br.scd on reports of the American Conul rte G-nenran at Mil.r-..


.- 11 -







CS-5 12 -

Mill consumption of raw cotton in the first half of 1936-37 may be
placed at, roughly, 300,000 bales of 478 pounds, or half of the estimate for
the total season 1935-36. Distribution by growths would appear to have been
about in the proportions indicated above for imports from August through
January. Mill stocks of cotton ire said to be very small, and at the end of
January 1937, were probably bctwuen 20,000 and 40,000 bales compared with
200,000 to 300,000 in normal years.


Mill Consur.ption and Output of Cotton Goods Very High in Japan
and China Japanese Imports of American Below Last Year 1

Japan

Yarn production in Japan in February amounted to 330,000 bales of
approxiLmtely 400 pounds. This compares with 295,400 bales in February 1936,
and is the largest yarn output for any month on record. The very large pro-
duction of yarn in recent months has been accompanied by a core than propor-
tionate increase in the production of nodiuu and fine counts. This increase
in the absolute and relative importance of ;-iedium and fine yarn is in part
the reflection of a larger demand for better quality cotton textiles by con-
sumers as a result of improved world economic conditions and larger incomes.
It also indicates, however, an increased technical skill on the part of the
Japanese manufacturer and cotton operative with a consequent ability to produce
profitably a higher quality goods in competition with the old and long estab-
lished cotton industries of Europe and the United States.

This upward trend in the production of the better quality cotton
textiles by Japan has been in evidence for some years. It has been a very
important influence tending to increase the proportion of total Japanese mill
consumption represented by Am:erican cotton, since the longer stapled and better
quality Acr.erican cotton is more suitable to the production of medium and
fairly high quality yarns than is Indian cotton, the chief competitor of
American cotton in Japan. In 1934-35 and 1935-36, however, the share of
American in total constuption decreased in spite of a continued increase
in the relative importance of medium and high quality yarn due to the high
price of American cotton relative to foreign growths. Apparently the decline
in the relative importance of Ar.erican cotton is continuing this season
largely as a result of continued relatively low prices and increased supply
of foreign cotton. Other factors have been partly responsible for the lesser
importance of ;Aerican cotton in recent months, and they are related to some
extent to the fact that the price of American has been relatively high. These
are, a difficulty in obtaining desirable qualities of Auerican cotton because
of the very brisk demand for these qualities by the textile industry in the
United States, the shipping strike in the United States, and the operation of
thu Japanese import licensing system.


1/ Prepared partly frou cables received from Agricultural Co:..iissioner
D',.wson at Shinghai under date of March 12 and 20.







- 13 -


Imports of all kinds of cotton in February -ere 373,000 oales, com-
-ared '?ith 390,000 bales in the correspondin.- month a y-ar earlier. Im-
ports of American of 77,000 bales amounted to l.ss tian half of the imports
in February 1936 and February 1935, --herees imports of all gro-ths other
than American were one-thir. larger than in the corresponding month of the
2 preceding years. In the b months, September through February of this
season, imr-orts of all kinis of cotton -ere 2,166,000 bales or 22 percent
more than in the same period a year earlier. Imports of the principal kinds
of cotton as a percentage of imports in the same 6 months of the preceding
season were as follows: American 18 percent smaller, Indian 5g percent
larger, Egyptian 80 percent larger, and Sundries 10S percent greater.

China

Arrivals of Chinese cotton at Shanghai -ere very large during Fet-
ruary. Stocks in mills are estimated to be eqJ.al to 3 months' requirements.
In site of heavy arrivals of Chinese cotton and comparatively larae stocks,
it is estimated that stocks in the interior amount to one-'hir. of the
present season's crop (crop no- estimated at 3,650,000 bales) Chinese mill
activity has continued at an exceptionally high rate, and on the lasis of
present prospects Chin-se mill consumption this season will amount to about
2,500,000 bales of 500 pounds, a record high. Mill consumption in the 10-
year period ended 1932-33 averaged a little more than 2,000,0'C bales.

Spinners' margins showed some decrease in Feb-uarr owing to a de-
crease in yarn prices and a continued firmness in.the nrice of raw cotton.
The fact that the price of Chinese cotton did not follow the rise whi?..
occurred in cotton prices in -orl1 markets nas resulted in the price of
Chinese cotton being almost low enough to permit the export of considerable
quantities of spinnable cotton. Exports to date, hto-ever, have bee.- com-
paratively small. Some months ago it was anticipated that the br-::r Chinese
crop would cause the price of Chinese -otton to fall belo- th proi.t -.-cre
the tariff would be effe tive and that exports would be -ompartivel-" large
as a result. To date, ho-ever, the price of Chinese cotton har bccr. eld
above export levels by the unexpe-tedly heavy demands of the Chinese Cotton
Manufacturing industry.
Pro auction, Acreap.. and Crop Conditions
United States

The report of farJcrs' intentions to plnt, issued March Io,
covered all major farn products except cotton. This crop is c..:ittc; because
the Bureau of Ajgricultural r Eono:-ics is legally prohibited fre'.: c:.; i'.!i
and publishing reports stating the intentionsof fain:.rs .s to the fcr-t-..-re
to be planted& in cotton. The first official esti..-.te of acre.,:e of cottonn
in cultivation will bu issued July G by the Crop RL'ortin. Pcaird.





cs-5


- 14 -


Egypt

Ginnings up to March 1 totaled 1,770,000 bales of 478 pounds net, of
which 90,000 bales were Sakellaridis and 1,630,100 bales other varieties
(including 6carto). Total innings so far this year are 12 percent larger
than innings up to the.saue date last year. Ginnings of Saks are 40 percent
smaller and all other varieties 24 percent larger. Trade reports state with
respect to the new crop that planting is in full swing in Upper Egypt and
some early sowing has taken place in the Delta. Weather conditions are
reported to be reasonably good, and while no acreage figures are available,
the trade believes that Egyptian acreage will be as large as in 1936-37.

Brazil

Heavy rainfall is reported to have occurred in the cotton growing
regions of Sao Paulo during Janurry, but apparently the new cotton crop has
not been extensively damaged. It is also reported that several plant pests
which had been expected to cause considerable damage have been less harmful
than was expected. Generally favorable temperature and rainfall conditions
and a small or moderate amount of damage fro.: insect pests indicate a com-
paratively high yield per acre on an area which, judging from the seed dis-
tributed for planting purposes, is considerably larger than last year. With
favorable conditions for growing and maturing, this should nean a new record
high production in Southern Brazil this year. On the basis of average growing
conditions and the normal length of ti:e required to mature the cotton plant,
the picking of cotton in Southern Brazil should have cozj-enced in late
February or in early March.

The State of Parana (Southern Brazil), which heretofore has not been
an important cotton producing area, is reported to have increased its cotton
acreage this season as a result of persistently low prices for coffee.

Evidence of continued efforts of the various branches of the
Government in Brazil to encourage cotton growing is given by a law of the
State of Bahia on DeceLber 13, 1936, which provides that any new industry
which may be established in the State after the passage of the law, and,
in addition, all cotton presses baling cotton for export, will be exempted
froL~ the State's industrial, professional, and-export taxes during the next
9 years.

Chlma

The cnoparatively large inco-e received this season by Chinese
cotton growers as a result, on the one hand, of a large crop and, on the
other, of an unexpectedly high price resulting fror a brisk demand for
cotton by the Chinese cotton spinning industries gives prospect of result-
ing in an increase in cotton acreage this spring. It is reported that
deficient soil ,Loisture to date makes it doubtful whether there will be any
increase in the cotton area in North China. It is believed, however, that
some increase in acreage will take place in 1937 as compared with 1936 in
the Yangtze Valley. While it is .:uch too early to :..ake any forecasts of the
1937 acreage figure, it seems likely that with average weather conditions
acreage will be at least as large and probably larger than the record acreage
of the 1936-37 crop.




Cotton, world : I'ill stocks by grcwths, August 1, and February 1, average 1923-24 to 1932-33, 1
annual 1930-31 to 1936-37 oi

Season : -merican Indian : Egyptian : Sundries : All kinds
beCinning: World :Foreign countries: World : Wrld : World : World :Foreign countries
August :Aug. l:Feb. 1: Aug. 1 : Feb. 1 :Aug. :Fe'. 1:Aug. l:Feb. l:Aug. 1:Feb. 1:Auc. 1:Feb. 1: Aug. 1 : Feb. 1
S1, 1,00 1,00 1,000 1,00 3 ,00 1,00 1,000 1,000 1,000 1,000 1,000 11.00
: raes bales bales bales bales bales bales ales bales 1ales bales bales bales bales
IrrF r -rr -w/ -w ~7r -rr w -17 / -1 r 7- -r ~1
Avera -e
1923-24 t3 2,344 2,706 1,370 1,999 1,264 834 291 28.5 626 734 4,225 4,527 3,177 2,861
1932-23

1931)-1 : 1,985 2,429 937 907 1,364 989 325 28? 639 745 4,313 4,444 3,157 2,847
1I31-22 : 1,872 2,777 95) 1,194 1,274 8)2 392 300 660 637 4,108 4,516 3,122 2,884
1.32-33 : 2,542 2,703 1,379 1,248 835 587 328 298 660 803 4,365 4,491 3,154 2,999
1933-Z: : 2,557 2,877 1,259 1,320 1,221 977 346 355 730 941 4,854 5,150 3,511 3,552
1934-35 : 2,304 2,144 1,132 995 1,335 996 395 432 1,1)3 1,245 5,137 4,817 3,919 3,63)
1935-36 : 1,7)4 2,247 955 843 1,248 809 407 420 1,266 1,4)3 4,625 4,879 3,843 3,449 '
1953-37 : 1,572 2,773 716 739 1,279 1,026 383 404 1,13 1,688 4,641 5,891 3,744 3,825 '



Cjmputod from data report( i by the International Federation of IFaster Cotton Spinners' and I'anufacturers' Assic-
iati)ns except as fl)1ors:
The Urited States, fr)n. *e-jorts of the E.:reau of the Census; China, from reports of the C' inese Cotton T:ill-
awneras ssX .o...n; Germ.,:i-y for 1935-36 and Italy f)r 1935-36 and 1930-u7, estimates of the Bureau )f Agricul-
tural Eccnrm)Tics.

L/ Ar.'ri3rin ru-d inrijc n rrunilng bales; Indian and Egyptian in bales of approxin.-tely 5b)0 pounds, converted
fr-. r'n"in, tbnl*s by c'nsiiering 1 Indian bale equal to 0.8 bale and 1 E;:yprtirn bale equal to 1.5 bales.







Cotton: Mill consumption, by growths, average 1923-24 to 1932-33, annual 1930-31 to 156-37 cr

erican Indian Eg yptian : Sundries : All kinds
,o rld Foren World world world World Foreign
eason : countries : : ____ __ countries
ginning: alf" 12 Half : 12 : Half : 12 :Half :12 Half 12 :Half : 12 ::lf
august year :months :year :months: year :rionths: year :months: year :months: year :months : year :months
: Aug.-: A Aug Au- g g.-: Aug.-: ug.- Aug.- Aug.-: Aug.-: Aug.- Aug.- : Aug.- : Au.- : Aug.-
: Jan. : July : Jan. : July Jan. : uly : Jan. : July : Jan. : July : Jan. : July : Jan. : July
: 1,000 1,000 1,000 ',000 1,000 ,000 1,)00 1,000 1,000 1,000 1,000 1,000 ],000 1,zj0)0
: bales bales bales bales balales ales ales bales bales bales baes bales bales bales
Ti.. T _, YT T'--f ;- 17 1T -- iT 1 '"" "
rage
33-24 to:
32-33 : 6,747 13,476 3,779 7,549 2,190 4,269 712 1,427 2,116 4,361 11,765 23,533 8,670 17,351

0-31 : 5,272 10,901 2,901 5,817 2,466 4,80S 592 1,260 2,479 4,862 10,809 21,831 8,349 16,568
51-32 6,112 12,316 3,549 7,572 2,317 3,925 710 1,431 2,113 4,234 11,252 21,900 8.626 17.040




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