S / / .'. r / .o

U::ITED Sr'AT-S EPART::"T OF AGRICULTUR-
Sui^.u .ir Agricul t..'al 7co:.u. ,ics
WasniJ tun
es ;1,- i :") tan

C-76 Jan.- -ry 26, 1932

ORLD COTTIO: PRuS.rECTS
Sumwrmar

Sicmll cotton crops in foreign ccuitries and low stocks of American

cotton abroad 'were largely responsible for the increase in exports of cotton

from th.e Unitel States in Deceiiber, according to the Bureau of A-
Economiics. In most years exports decline in December, but there have been

exceptional : ears, such as 1'23-27, wvhcn thie low priced crop moved to market

rather late and at a time when foreign demand was increasi.i,. So far this

season there is little evidence of a.i im-,,rovement in European demand, but

stocks in aErope are low and Ja:)an awnd Chiina have been tai:-in very lar.e

quantities of American cotton. Exports fro.- the United States in December

totaled 1,181,000 bales, an increase of 54 per cent over ex orts in Pecember

1930. This brings the total for the season to the end of December to 68,000

bales more than in the correspo;;digii period last season. Exports of .; ptian

cotton from Alexandria nave likewise be-n larger this season than last, but

from August 1 to January 7 exports froiri India were about 46 per cent less then.

in 1930-31.

Dominestic cotton consui.iption in December was about 10,000 bales more than

in December, 1930, and, although 12,000 bales below November, showed consider-

ably less tnan the average decline froi' l:ovember to Deceinbcr. Sales and

shipme-.ts of cotton cloth. in tnae United States during Pecember were less than

production resultinL in increased stock-s end lower unfilled orders. Tlis

made t..rec successive months in whiic '- toi:s have increased. As compared

with a year earlier, however, t;:is section of the Joa-icstic cotton industry is

in a considerably better statistical position since both sales and shipments






C-76 -2-

during the calendar year were in excess of production. In mid-January, yarn

and cloth demand in Great Britain was reported as improving, but during the

previous five or six weeks British manufactures had been losing ground. Sales

of textile, however, were still much below those during the period immediately

following the abandonment of the gold standard. In Continental 3urope it is

thought that the cotton textile industry as a whole is in a fairly satisfactory

statistical position in regard to stocks of goods on hand. France, where

stocks are reported to be 20 to 40 per cent more than a year ago and unfilled

orders 30 to 40 per cent lower, is the only outstanding exception. Yarn and

cloth sales in Italy have been mostly above production since the middle of

1931 and unfilled orders have been rising slightly since the spring of 1931.

On the Continent the outlook for the cotton textile industry is largely

dependent upon the political, financial and related factors. In the Orient

cotton textile activity continues at a rather satisfactory level. The Japanese

are feeling the effects of the Chinese bo-cott, but this has brought increased

operations in the Chinese mills.

Cotton prices in domestic marketsduring the six weeks ended Deccem'r 18,

advanced about three-fourths cent per pound and on January 18 was 1.47 cents per

pound above the low point for the season, but by January 22 wore 1.34 cents

above. In foreign marl:ats ;priccs of Amoric.Ln cotton when adjusted to a gold

basis have shown somc,.hat similar ch'.ng1s. In comparison with prices of Indian

and Chinese cotton, pricJ-s of liiorican in foreign markets continue to become

relatively cheaper.

Information obtained so far continues to point to production in foreign

countries more than 1,000,000 balcs'loss than in 1930-31. i recent report

from Russia shows the revised 1931-32 acreao, about 9 per cent smaller than that

previously reported. This Bureau has reduced its estimate of the 1931-32





C-76 -3-

Russian cotton crop from 2,000,j00 bai.;s to 1.,00j,0..0 bales. Gin::in.s of

Egyptian cotton up to Januar:. 1 were 3 per cent below ginniins to the sm-ne

date last season and roceip:ts at Alexandria from A-.lust 1 to January 13, wre

8 per cent larger than in 1930-31. Since the crop is estimated at 18 per Cent

clss thLn last s-ason these _i::zinis and receipts i'irurcs i:cdicate thlt the

cotton is being binned faster or earlier than last season or the estii.irted

production is too small. In India recLiots at Somjbe, up to January 14 were

less than -alf of t..osc for the sa.ie -riod in 1930-31 w.jican tends to confirm

the belief that the crop this season will be nuch smaller.

Prices

Spots

During the past five or si;x wc.':s cotton pricess in domestic markets have
displaced conridcrable strength and on Jauary 18 tnc av-ra:-e of Uidliing 7/8
in the 10 spot inarkets was 6.36 cents ,ir ;our.d or C.-1 cents above the price
one i.mo'th earlier aid 0.79 cents above the- quotation six wceks earlier. As
compared with the low point of the PF:.son tt.- price. on Jan?-ary 18 was 1.47
cents P.r poundI hij.er. T1e rice in these markets on J.::-.-.ury 19 last year
was 9.22 cents. In Livtr-mol,- ;pices of Ame;'ican cotton on a gold b-sis have
adva.iced about i:.; -i'ne with tn-c cha-ijgEs in domestic marluts.

A comparison of te .,rices of A.crican and Indiai. cotton at Liv. rp..ol
shows thit I.-.ia co;:ti-uez to accoi.-i: ilorc ex:pensivt relative to Araerica-.
On Janu..r; t 8 t.- varac ric o_ t.rue t pa. of I..dia C cotton avera.g;d 94.6
per cent ar ,:C ... as thb' a.vr-';e of Americr. .id.li.x and Lo: idlingn, wjCre-
as on Dflce..bcr 11 tey r.vrr._-ed 92.6 icr cent. About t.ie miiadle of Jranu-ry
the avcral- of four imporuait t, pcs of India.L cotto(. at Br'eui. Germany,
aver'c ea 106 per cent of t:he price of Ainric-no iid,-ilin, co n.ared with 101 one
month c.-rlikr, 81 in JanuarL,' 190l, rnd 96 in Januiar:' 1i27. In Japan nid
ChinP. Ar.:cricc cotton continues to rc iai.-, ci7.p rela-tivc to the prices of
cormn ting _ro:-'tts. Chinesc cotton in Si-i;'.;ai is selling for prc,-t.ll ;
the sam oricc as A. cricr: w-aic:i is ,cn...ral.ly;, considered nuc'l more de-irable,
consequently millers are showin : little interest in native cotton.

Stocks an.i iovc..ents

Apparent supp,- of Arierican cotton in th.e United. S. t tes

On J.rnuar, 1 the ap.c,.rent su..:)l.. of .i.Arica.n cotton remnoingi in the
United Str.tcs for tnc remainder of the season w-.s 17,003,0LO bales. 2his
compares wit:i 12,682,000 bales a year e-rlicr and -'ith 13,815,000 bcles at
t.he sa;.e time in tn;. 1925-27 season, t.i previous record supply for t..is time
of the cear. T.e decrease ii tin Unit.ed Statcs su-ply during Decc.Aber this







C-76 -4- .

season o.1ou.tcd to about 431,000 'il-. s ,iorj t.henc 'during Decccab.r, 1930, the
disapp.-.'ncc (conuption plu exports) 0o r .w cotton fromi the Unitd Sttes
totalini-; i,5?7,CO00 and l,13u,0.j0 b-jl-r respecctively during th: two non-ths.
The total disapL e-.rr.ce of Americvz cotton :;o far this season --as .aiounmied
to 6,177,,0.0 blcs whereas dol.estic consu-mption ar.d exports for the first
five iont:s of last seasson r.,:ou:.ti'.d to'5,831, )0 bales or 5 per cent less.

World visible supn4l

On Jr.:-.uary 15, 1932 the totnl visible supply of A.~.ricj. cotton w'.s
8,561,530 running ba:lcs, nL incr_-se of rabcut 11 per 'cent over the 7,714,000
bales visible yec r Larlicr, n.ccordin.- to data contained in the Coinmr;rcial
and Fin:ricial Chronicle. T..c Ar,-rici. cotton visible outside tic United States,
however, v:a.s 23 per caet less wile th.t in t'n U;it .d States was about 22
jr cent -re.tor. -In 03.s of srTarican cotton the. ,bovc comparison of the
supply of thaes.b t'.:o seasons is :.izilending, since there is an unusully large
pmrount of Ac.,Irican cotton at the proscnt tii'.e which is not classed as visible.
Foreign cotton visible or. Januc:;' 8 on the other h'cl, was 15 per cent less
thVn, a yc:.r c-rlier.

Exports il .-merican cotton

Z:',orts of Ame;'rican' cotton ,.irin. Dec,..bier' amounted to 1,161,00 ru .i-.ing
bales co...ra.rci vitn 765,020 rui.ning bals in Zco.-imbcr 1930 or -an increase of
54 per cc-at according: to reports of th.L. Ereau of the Cqnsus. Total exports
for the sc-.son Aubust-Dcc.nbcr Caounted to 4,035,000 bales which is 89,000
bales moir th,;; during the first five i.onths last sca.son. Coi.pniing exports
this season with those for the corresponding month a year ago, a relative
increase is snown for each month since Septem-ber. Recently exports to Great
Britain have incrcs.scd but Japan- anid China have been the outstanding takers
of kPjcrican cotton this scr,.son. Exports for the season to January 1 to Japan
were 108 per cent or 515,000 bjles larger ti.-.;- for the corre.sponding d.te last
year; t.ioso to Great Britain were 21 per cent or 155,000 bales less; tose to
Germany 25 per cent or 284,000 bales lesc and tnose to FrLiace 75 per cent or
478,000 bales less but those to Italy 16 per cent or 45,030 brics more.

Exports of EC.'ptian cotton

From August 1 to Jrnur.ry 6 total exports of cotton from Alexandria
Egypt, a oaitcd to 454,0-.0 rnui-ing b.les, an increase of 60,000 bcles or 15
per cent over the 1930-31 period, accoruin, to the Co.immercial and Financial
Chronicle. It is interesting to note, toweyvr, that all of the increase over
the previous season tool: place in August. Exports during the four weeks
ended Jc.u.a.ry 6 were practically the s:r.ne as during tho corresponding weeks
of 1930-J1. The Continent of Europe and India combined have ta.en practically
the sarr.e r;nount of Egyptian cotton from August 1 to January 6 this season
as in the like period of last sea.son. Exports to Great Britain, however, have
been about 53,000 bales or 40 per cent more th.a in 1930-31.





-5-


Exports of Indian cotton

In contrast to the sli.ht increase in exports of American cotton so
far this sca.:in ias col:.pared .'iith last season and the 15 per cent increate
in the movementnt of EGCptian, exports of cotton from India front Au G.t 1 to
January 7 -were about 46 per cent less than last season. These low export
figures ,s well as the receipts at Bormbe indicate that the crop this seL.son
is much smaller tnan in 1930-31. The Continent has ta]en about 60 per cent
less Indieia cotton this season, Grecr.t Britain 54 per cent less and JI_,pan
anii Chin.-, co,:bined 36 per cent less. The export movement for recent 1,eetls
shows an even ,reater decline from the corres, ondin, period of last ye-r,
and in t.-e four weels ended January 7, 1932 totaled only 38 per cent as much
as last season.

Stocks in consumi:n establishments

Althol; do..oestic mills hrve been consuming since last June more cotton
each month thnan during the corres podii., month of the previous s--.son,
their stocks of raw cotton have been below a year earlier for several months
bt in o'.. emb.:~r ea.d Decemrber were not as much below as in previous months.
At the ed. of Dece.~-ber stocks .-t mills amounted to 1,631,000 bales co..Ja.red
with 1,656,000 bales a year earlier. In April 1931 t-lC-hey were 292,000
bales s.:.iler than the corresponding period of 1-'0. ',hen stocks of foreign
cotton .-.re excluded it ap:;':e.rs that at the end of Decei.-ber domestic mills
held larger stocks oL A. micrican 'otton t'i on December 31, 1i)0. Stocks
of foreign cottons on Dece.'ioer 1 were -',024 bales less than twelve months
earlier due to the fa t th:,t consu..~,tion has been running above imports.
The ta-ri'f on loan stc'ble cotton has been a factor in this connection.

Stocks in public storc7:e anid ._a cDm'resEes

Ca Dece.,ber 31, L1l, there were 10,-126,000 ruvniing bales of row cotton
in public storage ai-d at corr.presses in t'Le United States compared with
8,376,030 scales o.e :,ear ea.rlier. There we. an even larger increase in the
amnounlt :-- ii.ieril'an cotton in stor.-ge during this period.

Textile Sitaction

United t r ts

Cotton conrsum- tion in t..,: United States after adjust.ic-it for the
normal seasonal trend showed a decline fro,. July throui': Uovember, but the
index of cons.aiuption in r.ovemb..r of 84 (1923-1925 = 100) was still 7 points


C-76







C-76 -6-



above t.- lo-.. of Dece.nber 1i30 and was 1 point above iover.o,:-r, 19O0. Con-
sumption in, Dcce'.bor was 12,000 bales below the previous month, but this
was coa,.s':1rably less than the average decline fro.- iU.eve;i er to Dece,.iber
during cLt: ;.-ast five years of 49,'j,.0 b;les. The 415,:J00 bales consumed in
Dece.-b-r, 1',31, wes about 10,C..3 bales .nore ta-a. Dece..iber 1-J. consu..ytion
and bro:., A.t tie totl- for tne season to 2,126,0.%.1 bcles. This was 186,0 -"
bales or L.3 ,er cent more tLiAn was consm.Led from Au'ust 1 to Decei.ber 31,
1930.' Since last Juane d.omistic iills have b:.en consumin; inore cotton t.ian
Lutri., t.L.- saotie irionth of the previouss se;-.son.

In t,.e do0.estic cotton cloth industry uroaurtion iLn Eecember aver-
aged 50.S ..itlion j.'-rds per week: which was 12.0 p-r cent below tae rate of
production m:aintainud during lTavernber, bat was 8.8 per cent above Deceanber
1930, ;:c-oidin.. to re'prts of t.:i Association of Cotton Textile :-'.:rchi;ts
o01 .e.,' or3'. S...ls eid. shaipints ini Decemr.ber were also below .-ovr..ber as
is u s II,. t-.e case but t.ie,' too wcrE ab;ve Deccb,.-r r 193'J a.-d v'ru below
proiuczio.L, res.a.lLing in an incre. se in stocks on -,~c-d- a-.d a decrease in
uniill'ed. orders during tne mnont-i. For t.;e calendar y-ur 13,2, however,
both scles and sh-ior..,:lIts were sabstant'.ally in excess of production an-d
at the c.ii of 1951 stocks were 20.3 p-er cc.t below a ear e-rlier and un-
filled orders 11.5 ,,r cent abovL. T.:is section of t-e dori-stic cotton
industr:- is, therefore, in a considLur.bl: better stL tistical positio-n than
a yerr :go.










4




C-73
Lf-~ I .


-7-


Great Fritain

:i: cotton txtilo in0dut:4 of "r-at Britain witnessed a substantial
i.-rrov.2.-i,:nt follow' in;, t1l r'.;.onm nt of the .cold standard in Sc)tmnbcr and for
several oe.:s zrl,'s .'2rc mwun above the greatly increased production. During
the jcriod frc..- l-to .I'vt it.'r to earl;: January, h,..vr, British :Ianufacturcrs
wcrc losing ; ro-..nd, s"l.;s ir. iost lines havi..L been bolo.: prol...ction c.lri-.g this
period 'nd th, s:ina:crs' ..largin cdcrcasing. At rid-January yarn and cloth demand
7-/:s ".in r: ~ort-d :as imr.roving. Larger cloth inquiries were reported from India
and China anr.d yarn tu-rncov:r :was slightly larger. The yarn i-ir-:in on January 15
was still lo.;rr notT;ithst.anidi:,- the im':'ro-ved demand conditions. The i:.;-rrvacr.:nt
in dr:c... wvas said to have booen in anticipation of hi;ghr yarn ar.nd cloth ipriccs.

It has becn oexcted that the recent conflict beit. ccn the British and
Indian politic-1l lcr-crs in India would reduce the cloth demand from that irmort-
ant nm.r::ct. So:.Ac ootij..ism exists concernr.ig trade with China, which is Great
Brit in's r.ccond lr.rcst foreign market for cotton manufact-arcs, in view of the
continuation of the Chinesc boycott of Japanose goods.

A.m-arcntly Great Britain has not received as much competition aong her
fine -oods r.:crk:ts, for during the zceaon up to about the middle of Deccmber for-
w.nrdinrs of E- ytian and Sudan cotton to British spinners v:orc about 67 per cent
gr?.' .r t.han in t.hc s7nvc period the rcvio 's season, while forwardings of all
other entton- : r.r only ::I :,cr cent r. ator. It scos likely tlht the coarse .
goods ..anuf-ct-.rcrs arc suffering more from the Indian boycott of British goods
since tihe ndinn ,.iill s v'hich produce a larger proportion of coarse goods have beer
very active t.is scacon.

Continental Euro-)m in 1931

The~.- r.vc bcn ne-:.rly four ears of virtually continuous roco-sion in
the contin'.ntal cotton iill .and textile trade activity. Felling prices, rising
uncl.oloyrmcnt, declining wa .cs a .ad the semi-paralysis of economic activity result-
ing fro:.i t;ec -_ncral credit crisis hnve rdu'cod Euroeoan cornu'ription of raw cot tor
and cotton L.oods to a lo--r level than any si:ic the yerrs of the Germnn infla-
tion, (1922 and 192j) yet, statistically the cotton iA,uetrj over the Continent
as 2 :-.holc sccn to have reached firmer ground.

The newc ycr opens with cotton textile production apparently adjusted on
the vwholc to the current low rate of consumption. The stocks situation also
scorns well in hand. Cotton mill out:.iut is now running about 25 per cent bclow7
the lovel Jf the active year 17;7-2u- m.A around 17 per cent below the av.:raec of
the .ast s: vc.- years. Mill stocks of finished and ecr.ii-finishod goods ho.vc been
worked d&w:n to .iodern.tc and even low Icvclz in practically all i: :portant counntries
exce-ct Fra-ncc, -.*'.rc rcd-:ction is now tvlciing ploce. Reduced goods stocks in
distributing channel have long been indicated by the trade's general policy of
hand-to-.mouth buyiing.

The ke1y to the future trend of Europcan cotton consumption clearly lies in
the -cncral c-c,:nonuic situation. Conditio-s in the cotton industry and low -rices
of rawv nr.tericl have bccn conducive to revival for several months, but to date
the stcnd;,' do.'nwiard drift in -encrals business, the financial crisis and oxtrmoe
political uncertainty have preclded any real turn for the better,
I- 3-sjd l,"rr'jly on AIriculturnl Attr.ch L. V. SteoroE's report cf December O0,
1931 su- >lcuci.ted by cable on January 15, 1932.




C-76 -8-

Dcvlc-.:.cnts in Euoro -'ca: raw cotton .-id cotton textile markcts in 1931
orec largely under the influence of the heavy raw material su-rjlics, the result--
ant decline in cotton .;ricon, .and the critical turn in worldd financial conditions
The stinr:lating i.Ifl-uncc of the we.r-debt moratorium and occasional u-oturns in
nriccs were never effective in curbing bearish sontircnt for any length of timo,
Thj revival of s- eculativo o-tiroism on all commodity markets in October led to
ccinsid, rable improvc...nt in sales of y-.rn an.d goods in many Party of the Contin-
cnt, but political and financial difficulties subsequently assiuicd such nrapor-
tions thi.t the imoro'.roncnt -.as short 1.ived. The political, financial, and re-
lated factors which havc -.rcvnted revival in the cotton industry during 1931 --
the bn:.-ci.G crisis, gro':i:,g trade r-strictio.s in the forrn of rising tariffs,
import co:tin:cnts a.nd control of foreign oxchango payr.ints, the abandon aent of
the oldi standard by C-rcnt Britain and other countries, and the unusual severity
of the a ricultural crisis in cascorn Eurooc -- aro still i-poortant factors. Upon
taom hi. .c the r turn of co:ifidc.icc and i.- rovmcC.t in the -nurchasin:- po:7cr of
i!) iort..:t co.'.sx-.i..: ..rcas for European textile 1coods.

The vcv.!.int of rw cotton -nriccrs wns alro a factor of soc.e in-portanco in
influe.-ci.- rT..ill con:-uirnti: a.-:d the ..iover'..u: t of .oods in'o distributing chjann ls
Co..Lii:ucd 'er-:-uc.s has oncourna'cd hand-to-.a uth buying of both ra7; cotton and
cotton ..l,.nufac,;urs. The r.ove..1..t of cotton rices will -robably continue to
affect trlado b"'inL.: Cons-u.ic1r bu'ing; of cotton. textiles, ho'vcir, is -robably
mo-re dc 'e.-dcA;t -L-)unon conditions affoctin.,; .rchasing Tov,:'r.
The_ position of .1.c'ricnn in r.'lation. to cor:ictitive cottons oi_ the Contincat

Althou h Indi'.:: cotton -rices ;..*re co. ;.inhat hi .cr 'uri.'. the 1330-31
ses3n ti.n:1, i.- 193.-3-i in rcltion to .icric.ia, th' csharo of I.ndian: cotton in
coi.ti ,i:.-t1 !.ill ct Si..: io.. .wc.s : i .aintai .d. Lo,.:: r relative iriccs of
ES j.-ti.:. i' 190-31 r..L t..d, : io-cvor, in a"- i..cr: esd share of E;,: 'ti-n in
conti.-ic.tal ..l..i co:-.u ,ti.. inrin tic c rre.i-.t sc.sor., si.-ce Indi n cotton
has bzco..co .uichl higih:r ,riccd in relation to A.-.:rican, the -ro-orti of I:ndian
!'ro'-tls co.'isu.,.ad is a"-pircntl-' decrcasin:g. This would be in li:n I ith trade
rcenorts indication ; th.t r.ill -:.rchas:-s of Indian cotton have boon relatively small
so far this 'car and. cxrort fi~urcs which show that cxoorts of India: cotton for
this season up to January 7 norc almost 60 "O)r cent belowv last season, v,.horoans
creorts of A.Aerican cotton to Continent.al Euro:-,o frn. August 1 to January 1 weor
about 40 .or cjnt below the corros-ondi.-n ncriod last season.

Relative n-riccs of Ejrptian cotton are now only slightly above thoso of
last :yc:r, and there has bccn a nore stable nill consur.ntion of this type on til
Continent. .-s a. result er-orts fror E1')t to the Continent from Soetc:-.bor 1 to
about Dccoebocr 23 'el'o 3o:1l- 21 *.:-r cent below the s~:c- --cried in 1930.



Gcnl.-ny eoeiricnccd a year of drastic curtail:.:e.1t in textile outiJut in
1931. All h..o-c for an i:.iprover.ie;t in the situnticn held at tih bcinnuing of the
year v3s destroyed b.- the i rthcr brock in ra,' cotton -riccs, and by the rencral
ecn.m.,ic a:.d financial crisis after he riddle of the year. A slijgt revival in
mill soles of '"r:i a.-d goodss accormoanicd by some increase in both sninnii-g and
-.oavin.L ill activity, was evident during the first half of the year, but this
disa-nc-.red lnter in the year v:hon the financial conditions bccr.lic so severe.

I-n October, 'when co.rnodit.,-r.'rkets stroi-cthonod a.'d ac"ivc speculation
was %. ain ob~srvod, increased buri.-- activity developed for yarns and c;oocs,
to ether vith s. :e scnsoral increase in takin.Cs by wholcsalers and retailers.





C-76


-9-


This vwas cd-.e chiefl-: t .;h; sh.r rise in rat, cott. qaotatio-s, although a
dQ.irc to obt.in "r:rl- values" in a tinc of currency uncertainty also contributed
toward incre:.scd buyi.-_ of cotton ;nrn .nd ,oods at that tine. This i. :rovc.-t,
ho':cvcr, was :n-t :.-?i..t-i:.cd in lTdvc .ier a .d Docc.ibor, and the Gcr.nan public, de-
s itc ast inflrti t;xCoric:co, -"s shoun re.~i:-~.jlo discipline about unsound
"r.L.rk-fli ht" ..urch0scs v.'hich sooner or later would have brro-,u.t about a busine ss
brcak-..o%;n.

The statistical --osition of the GCr..:a.. cotton i:-.:i.try ..'ul favor in-
crcas7c.i activity% in cas: of an iLi.:;rovc. .cnt in oncral conditions since stocks of
finish:cd. '" su:i-fi:-.isli.'d cotton {o'..s at the nills andc in distribution channels
are low7. rl-ucti n se: .s to be .-ell within the limits of the curro'nt low level
of c'.:.su:.cr c.c .rai. alth.u-u.J cloth .ils in t .z last few iac.nt.'.s hi:vo boon able to
.aintt.in c.i r.tc of ..ctivitl noticeably ae~bove that of last year. This is of course
favor.ni c t:, the spi-Li.:1; ind .stry.

Prices .f cotton :.-rns i. oo.s in Gcr-irany, cxcc-;t for a ";criodc in the
s:'rin;', '.ecli.-ic quite steadily up. to the o:cc of the en-r. The current level of
- ices -ould ii.a cacre .f an u;nturn in conditions favor the roelcnishicnt of stocks
by wholes-lers sand rztailcrc

C-cr. ..: ir. .rts "'f raw cotton have declined. hc vily in 1931, .'ith net in-
D)rts of all _rowths u-i to the end of Novneber of 955,000 equivalent 478 -ound
ba.lcs as cor,arcd with 1,206,000 bales in the first cloven months of 1930, or a
c.cr.:ace of 21 r cent. Recently, however, cotton novenont to Gor._any;l has irn-
:'rovccd. In Cctobr N-cr, N-u and DDcc.bcr, 1531, exports of A'.crican cotton to
Gcrrina- :.crre 1-rrer than during the corresponding months of 1930, aand for the
three nonth. co:ibined wore about 11 -~er cent greator in 1931 than in 1933. haw
jorts of cotton yarn '.:i cotton jods were rach s!iallor in 1931 than in 1930.

Czocho slovakia

The heavy deocndo..ce of -Ice CzcchosloveLhian cotton industry on foreil-
:..arkets and the extrencl;- critical state of financial conditions and trade ro-
strictions in :iarl:kts surrounding Czochoslovik.ia, notably Germany, Austria and
Hungary, have nrade the '*-.at y.a.r an cxtrc.icl; unsatisfactory one for the textile
business, and render the outlook for 1932 uncertain. Much is contingent upon
restoration of confidence and bottenront of the cnciral business situation in
central and eastern Lurpnc.

Czechoslovokian xpo rts of yarn and cotton ,oods, in 1931, fell close to
30 -.cr cc:.t bchiid those of 1930 *..ich ncre alrcaCd considerably below previous
;'yrs. Textile cex.orts have been s-'ccially hrn-?crce. by the tariff conflict wit-
Hungary in effect si.-cc the torinition of the Czechoslovak-Hungarian coi.n-crcial
treat;- a yer .-;;o, a.:(. *rticul-.rly since the financial crisis and the introduc-
tio-n oif rcvere restrictions on forcigen c::cha: -c in both Hurnr- andC Austria clur-
i.nC t.hc lst half -f 191.

Czochoslova:i).a i..:ports of raw cotton of all "indcs during the first 10
months of 191 am-ountcd to only 332,000 equivalent bales of 478 pou-..s as cor.ipr-
ed :ith 410, OO bales in the searc: ru:iths of last year, a decrease of 19 ;er ec. t.






0-76


Austria

In Austria the cotton textile industry ).aszccl tirou hi a ver- sevcre ;ar
in 1931 and t.e rese::t co.litio-:.s are disco:.rai "i; chieffly because of the ox-
tree.cl,- wca-: positi.'n of Austria, economically, an'. the ;.rcat uncertainty as to
future financial d.vclorpn ients.

'he broc:dow- of t.:~c Austrian Crciitanstalt in lilrch, 1931, w ich is fe-
qucatly r.e ,rdcd cs having prcci-mitatod the European credit crisis, svecrely
haI.,ri d the cotton textile industry. A -nu-bcr of I.iills are directly affected
by the ba.-' s liquidation, -and have had and arc still havin;. difficulty in obtain
in.Z -cces: ry credit clcal.cre. Tihe i..Custry- has rca ed some tcr.. orary a.dvcntage
fro:. the r lstrictin of irnrts rcsulti.: front .-c c,..trol of forci.i exch:..o,
but tlisc :" e-rs to be m.iore than off-set by the incrzascd scvcrit.- of thl.c rcncr al
crisis.

France

All "raich:ic of thP French induLstry have bocon forced to curtail o-cratio ns
to a .:i.rtd extont :.ri.g 1L31. Stoin.li.Lg. i:ill activit- has beon r'. c1-cd ne rmuch
as 30 ~ r c.--t i.: rcc.-t rlonths as co..:pared with last ; c-r, thouL'h cloth r'.ill ro-
cx.ctiDn ha.-s fallen j-l- 10 to 20 cr c.-t. Stoo.-s of -:'rn "-. fabrics at the nills
dlri:' th: l :st h.alf ;i' 1:31 have b, cn r..- rtcd t:i be J0 to 0 per cx:t hi icr
than a y' -r a o a-.-1 ,..-ifillcdc orders 30 to 410 cr c..-.t un..er t.-ocs on h-.and lst
ear a.t L..is tic. Th:se dovclo--. c.ts h..vo occurred in Scitc cf .. te-.;o .1onrth
textile strike in n:-rtlcrn ran inin the u.I .icr of -931 which could .:ot -have boan
without effect -n :rcd..cti.-n. Th .C co..Jitir.s are .not cncoju'rag;i:[ .articularly
lcn it is considered that uno:-.r1o nn.ct ha.s boon steadil; rising, in Fra:co, and
that cenoral economic activity both in France in its cx ort markets is low.

It is also significant that th!- French cotton in.&uEtr,' now7 finds itself in
no -ositi..n to maintain o-jorati.,ns in order to retain skilled textile labor as has
boon a decfinito polic- in the pact. British coi.rcti-ion is also much cor-laainc d
of recently, es-pcially in fine counts. Cor-ctition front :lanc in this class of
:oo:.s see:-.is likely to be felt increasingly, at least in cx ort r.:arkcts.

France was loaj an "island of -ros crity" in a r.ore or loss universally
dc-resscd Eurc.:oe, an.d. its cotton textile in.-uctry; along -;ith other industries-
was able to maintain n hi h levels of activity for .l1.ny r:-:ths after I.ills in other
countries h..Ld- been forced to reduce o ,-cra ions to .. .rZi .: extent. For several
months 7r-..ce 1-as also on-count.'rcd reduced orTdrs and has h1.d to contend with the
DroblcYl :f ovcr-ror,..cti..n an:. oxccsiive stocks. Thoc aro a -.arontly c.ccrcasirg
pro..ctin suffi'ic..tly n:'. to reduce st-ocks. Theo Cdcreacs of 75 -cr co-nt in
the cxncrtc of _..eOric..a. c.-tt.n to France fro..i Au- st 1 to Dccc.eber 31, 1931 as
com-.rcd 'iith th,. s.nel eri-'.d in !30 reflects both the dc--.rcssed condit io-s of
the industry in the latter -.xt .:.f 1931 a::c- the relatively -_rosoeorous conditions
a ycer earlier.

Italy

Thoui~ ,r.sc_.tin-" a -.ictu.ro of dce-, do- r:ssifn d ri.:; 1931, the Italima
cotton textile i:ndustry has Lracidally -.:or-cd back t:,c a oint ;:.-cro the statistic
*ositi-n is ..-oro favorable and i-.crcascd activity .as been re-ortcd.


-10-





-11-


Sharp curtailment of -iill operations during the second half of 1930 and
the first 9 months of 1931 has cleared stocks, improved the ratio of new orders
to current production, and e:iabled a slight rise in operations and unfilled orders
during lthe -ast several months. For some tiei, ro;..ction in the strinig and
neavinig mills has been slightly above or level with last year, when it was 10 oer
cent below the year previous. Yarn and cloth sales have been mostly above curr ent
levels of output since tho middle of the year. Mill stoc-,s of ,oods and yarns
havo declined steadily since the fall of 193C, and unfilled orders have been ri s-
ing slightly since the s-ring of 1931. I rt i...-:orts of raw cotton, which were
greatly below corrcs ondcinr months of ithe previous cyar for a long timel, have
risen above last year's levels since the middle of 1931, though they arc still
greatly below corresponding m nti.s of the years 1927 to 1930.

These facts scci to indicate that certain adjust:Donts have been made within
the cotton ind stry, which, as far as conditions in the industry itself are con-
cerned, have )aved the way for a basic revival. None of the Euro-can countries
smcns so well -:..r-pared for a cotton mill recovery as Italy. But general economic
devclopnmnts and the possible after-offects of the Banca Commcrciale difficult cs
still domninatc the sitAation.

Belgium

Tlhc clian cotton textile industry witn.cssed a sharp drop in production
in the iast ycer. Stocks of yarn and cotton goods are now r:epo-rtod generally low
in Bclium and sonm im)rovcmjnt in orders, though partly seasonal in character,
has occurred recently, notwithstanding the fact that oxp.,rt business has been"
rendered difficult by the deoarture of Enjlacnd from the gold standard and higher
tariffs in mare, countries.

The Netherlands

The cotton industry in the r!therliands has been relatively less affected
than that of other countries by the business crisis in 191., although a general
textile strike has clouded the outlook as tho yonr closed. Export cutlets in the
Dutch East Indies are an important factor in the stability of conditions in the
Dutch industry. There is ncw the 'osi :b.j.i J of incrcre..e. Japaneso competition in
this market as a rcsi.lt of Japan's recent rc .lbrlnent of the gold standard.

Poland

The ycar 1931 was one of reduced operations and extensive financial diffi-
culties in the Polish cotton industry. Efforts to stabilizo conditions by ro-ori*
ganiza-ion o7f che s-oinner cartcl wore not f-i-ly succcss il causeue of difficulty ii
maintaining discipline among cartel mc-.ibers, i .'f..turers uand the t.-eac have
repeatedly s-.ffered extensive losses from the accumulation of largo stocks of
yarns and goods while -rices were declining. A possible alleviation of these dif-
ficulties is now to be soon in tei decision of tho Government to suLport adherence
to the cartel through an increase in im-nort duties on raw cotton for non-cartcl
spinners. If maintained, this policy scons likely to bring about gra-ter stabi l-
ity through forced downward adjustment of production to sales possibilities. The
unsatisfactory conditions led to the closing of all Lodz factories for four weeks
at the close of the year, but th s n -io'-rs to be only a temcinorry measure. Pol is.


0-76









C-76 -12-


exrorts of cotton cloth havc shown a considerable decline during 1931, althoiu
some recovcry of eo::-orts hoe rccntly occurred.

S'o.in

The Spr-nish cotton industry oxpcrienced only c r lativcly minor recession
during 1.31. m:ill c.jisum.tion of raw cotton is now r..-iortcd bolow nor-al, bc-
c-ouse of s)inn,:rs' difficulties in securi.-' foreign exchan-c for im-orts. So
far there is litt-Lc evidence thfat the currency; troubles have iTirorovcd. It is
important to note, however, that the curttailm..nt of cotton consumption does not
nicar to be basod u)on internal r.rrket or stock condition.

Swedon

The Swodish cotton i. .dustr;. had a relatively :oor Jc;r in 1931, but,
since ab-.ndc,-.n !.t of the gold standard .and the boci.1:-i-in: 0o a compensatory rise
in --rices, a good revival is reported to have developed. The imnrovcmnt in
raw cotton prices in October also scorns to have boee a stir.ul.ti:zg factor,

Russia

Cloth production in 1931 is thought to have arou-.ted to around
2,625,000,0030 yardss altho..gh final fiGurs aro yet lacking. This means a corn-
sidcrablc non-exocution of the 1931 plan, whiich -,rovidcd for a total output of
3,093,000,000 ycrds. The failure of the plan is attributed to technical and
labor difficulties, but the reduced outturn of the 1930 cotton crop C.lso soas,
to have been a facLor, notwithstandin:CL that fact that it is not mcntioncd in
the Russian pross.

Tia out-put of The Russian textile industry in cotton fabrics' during
recent years ma, be soon in the accompanying table.





C-7F -13-

Russia: Cotton cloth production 1925 to 1931

Cal.nd:.r yz..r Cloth production

: I;illion ypres
1925 ............ .................... : 1,827
192I ................. .. .... .: 2,553
1927 ......... ......... ........ : 2,586
1928 .... ... .. .... ..... . c..... : 2, F42"
1929 ........ ..... ..c... .... ... ...... : 3, 13
1930 .................................: 2,466
1931 .............................. : . 2,625

7Prilimin..ry.


The newly announced lan0l for the Russion cotton toxtilo industry in
193Z2 jrcvidcs 'for an increase in cloth ;roriuction of .ooout 25 per cent as
compc.rod with 1951. .. totr.l qu.ntity of 3,348,C00,000 yards cf finished
f'.bric is i:lacruncd. It is s..id t:.t 1 billion motors or bcut 1,094,000,00
y-rds of cloth requires from 600n,000 to -C150,000 b:-.1~ of rawv cotton of 478
0oundcs. This would rcquir 'bit-.tocn 1,600,C00 and 2,OCC,000 balos which is
about equal to the ostinc.tc'd production in Russia in the 1931-32 season.

China l/

The Chinese cotton mills in hanghai continued active about the
middle of Janu..r/ but zurtc.ilimo:t in Jla .noes section of industry at that
time cppoa-z.,. to t about t-.:nty per cont. Curtaill.cnt in operations of
Ja~ancso mills at Tientsin ad Tsingtao, on the other h.nd, has boon slight.
Arriv-ls of foreign cotton -at l:inghai during the quarter end:d Doccmber
1931 vworo about double ths tcso the fourth quarter of 1930, but arrivals
of native cotton have only boon :.bout t':elve yor cent of last jo.r duo
chiefly to low., prices of AT.orican amnd other foroigi cotton. The docroase
in tho crop has b--cn responsible for part of the docrc-sod arrivals of
domestic cotton, but arriv:.ls from Eoctions having a crop larger than last
year have also cn loss th:.n a yo:r aro. Total arrivals of all cotton : ct
Sh..nghai :.re sorrm,;hat belo\. thlo scae ou2.rter last y:ear. Stocks of rawr
cotton in .Shangha.i at prssnt :.ro not considered h:--.y.

Total mill consu].pticn of cotton in China for the quarter .'uzt nodod,
from infor.:mtion av il-..ilo, a.pre.:.rs to h:r.-c been albcut the sE:ne s-a yoe.r
c"o. There -.was, ho..'ov;er, an increase in 'j~:orican due to the low price re-
la:tion with India.n r.ncd Chinose. There seems to be a definite increase in
spining; of higher count yarns this yo:.r duo to che;-p A.,.ric-an cotton with
resultant decreased doemnd for Chinoso cotton for lower coiut yarn which
would ordinarily be in dom?.rd at this tine. Prices of Chinoso cotton re-
main too high to interest m.illeos and loss tan the usual portion o' the
corrmorcial crop has arrivcJd in Sha.nghai.

-- --~ _ -- -- `
I7 Lased largely on a cablb from .'gricultura Comnissioner Dawson at
.3hangli.i, dated Jrnua.ry 14, 193:.





C-75 -14-

The yr.rn mar.:t u-.s reported to Q,.vo :i'd.d c.n uncort: in tone duo to
theo glomy political outlcok and the approach of the Chinese New Trear. and
the year end settlements, vith tightness prevailing in the money inarket.
Yarn demand from the interior is not strong and it now appears that demand
for all China is somewhat less than a year earlier due to the decreased
purchasing porer of the consuners. ..

The .::.rket. for piece goods was-quiet' ih the" -.ast few weeks wi-th
little inquiry due to Zoreign holiCda',s abid aproach of te- Chinese Nmw
Year. Demand during succeeding weeks depends oh absence of major hostili-
ties in nort:i and. rogross of reconstruction in flooded areas. 3tocs<-s in
the interior are considered light.

Al.erican cotton during December totaled atcut l1l,00C bales of 47.
rounds comi.ared with 7,000 bales in november and about 100,CO bales in
Deceinbar lZj. -rr.orts of indian cotton 31. the other hand, showed a de-
crease from :love:ber to December the total for each .nonth being 34,000
and 17,000 Re.ivalent bales of -47E pounds respectively. Imports of American
cottcn for the- fourth uar.ter of 1931 anounte. to LcF ,000 bales and Indian
to only 3. b:2,D tales. For the 1931-E2 season it is expected that imports
of' nerian will reach nearly 1 million bales. Coir:ritments in early
January were heivy and some increase in buying is e:xcected after the
Chinese ie':' Year. There is little tendency evident to buy ahead for the
new ,rc;- year although many have contracted -"or rejuirer.ents for four or
five i-ornths". The ,redit situation and the uncertainty of the exchange are
factors restrio ting; .tis't2-t corrmitments.


Production, Acreage and Cro' Cocnc'.itions

Little infor'.-iation has been received during the past month that
has affected the estimate of the world piro&dction in 1P93-32. Indications
still pcint to .a wol.d pron'ut.tion a little les3 than 2 million bales larger
than in 193C-31 with foreign reductionon more than 1 i::illion bales less and
United States reductionn 3 .illior. bales greater.

United States

The D.ecemTber estimate cf iroductinn in the United States will hold
-jitil the final innings report of the Pureau of the Census is released
in :.arnh. At that time the final official estimate will be released.
During the pa-t "ou- years the Decem.ber Pstimate has been within 1 cr 2
rer cent of the final estimate.

1inninrQ Up to December :.3, 19[1 ther- hlad been 15,35,8,0C running bales
cf the 1951 crnp ginned. This ccMTrared with 13,259,00C0 bales up to t;he
same date in 13:1, 13, .F ,C0 bales in 1?29, and li',541-,'C tales in 192.6
the year of the recsrrd crol.. The innings from. December 1 to Decomber 13
totaled only L35,000 runni;rg bales which in relation to the size of the
crop vwas the smallest ar.cunt Finned during that je'iod for :TanY. years.
It should be remembered that the runnin. balos this season have averaged
considerably more thn 4-7. 0 poundrl net and the indications are that the
L.verige w-.eicht of thie bales ;inned this season will be the largest on
record.






C-76


Fertilizer ta' sales In Dece;fi'r 1931 sales of fertilizer t.,s in the
eight most import,.nt cotton producing States eroluding C-:le.io- -(0Oklahoma
uses very'little f-ertilizer) s;ow.ed a decline of 52 per cent from the
previous -ecimbcr, a-.C'.0 -10 per cent fro.i December 1929, accorJ.i:' to re-
ports of the Oational Fcrtilizer 2ssoci4tion.



In CGypt the 1931-32 crop is now estimated at 22.6 per cent below
1930-'i as was statoC last m month, .i-nings u to Janu.ry 1, however, were
only 8 per cent bolowr innings to the same date last season. 2otal i i:' s
to January 1 (excluding 23,000 bales of lot-':grade cotton called "Scorto")
amounted to 890,000 bales of 478 pounds not coinpared with 964,000 balls
th:e previous year. During the past three y'Jars gi:ninjs to Jan-ury 1 have
averaged 63 xper court of tho total production but Cinr.iiigs to January 1
this seas a are equivalent to 69 per cent of the estimated production.
The esti;l.at:d production of Sa: ollaridis for this scCson is about 37 per
cent bolow 1930-51 and the innings to January 1 were only 24 per cent
belo.' last season. Thei production of all varieties other than Sakollaridis
is estimated at 18 pr cent loss than in 1920-31 and ginnings to January 1
,werc 3 p-r c.nt less. This indicates that the crop this season is being
ginnCe fast r or earlier than last or the 2stimato of production is 3s.ill.
It is too early to say just what has caused this variance, for during tIh
past three years girnnings to January 1 have ranged betwoon 58 and 71 per cent
of the total. ?ioceipts of Eiyptian cotton at Alo::ancria fro.i Augsust 1 to
January 13 this s: so w:er 8 per cent .bovo the corresponding period in
1930-31.

India

'.o nM." .stima.t: of the Iniian crop has boon received since last
month, but receipts at Do!:ibaj continue to indicate that the crop is evident-
ly s;nc.llzr t-.an in 1930-51. Rocoipts at Bombay from ..ugust 1 to January 14
wvcr 54 )pr cent belo-.: that period in 1950-31, accordi:.. to reports in the
Commercial ard i'inmnci.1 Chronicle. Iills in I-ci.i car consulni:: ir.or:
cotton this year t:.c.n last, however; the crop is later than last season, and
the lo.; prices ;..v? _.ro-b.bly cursed owners in the interior to hold some of
their cotton in hopes of hii,: ; prices. Production on the area -:l1.tcd up
to Dec-mbcr 1 has boon estimated at 18.2 jer cent less than the production of
the corresponding part of the 1930-31 crop. The estimate for tiis area is
3,428,000 bzlcs of 473 -:ounds compared with 4,191,000 bales last season.

China

Th: fact th-.t tho Chinese crop: is much smaller this season (esti-
mated at 20 C.cr c:et s;n-.llr) is subst-.iti-t:-1 by the fact that Chinese
cotton is no-; selling for about thi sarmo price as imerican, whor3as, it
ordinarily solls for ccnsiderably loss, it boin Cogen.rally considered loss
d:sirj;bl tUl'n lmericaI. In addition it is r.-'orted that the receipts of
native cotto1 a.t 3Ih.ng:hai du'i:n the threO months ended cc.mb:r 31, 1931
woro only about 12 -:r c-t t of those of th: san _; iod the previous y,-.r.
Only a p.rt of tihe docra-.s is duo to the short crop, howcv:r, for receipts
woro also small fror. those : sections whoro it is d;-finitoly known that the
crop is larger than in 1950-31. : : l.c:: of interest on the -a.rt of the


-15-




C-76 .16-

spilnners duc to the ability to got -jAo:ricmn at about the sane price is
probably also a factor in th:1 small volume of receipts. T.stimatos for th.
;.:.:ntingcho-.7, h..nghai and Hanko-. areas place the crop 40 Der cent below
a yc-.r oLo. In nfrth China, Shar.tung, no-tci, Shc-nsi nd. northern -a onan
the crop is considered 15 jcr cent 1-rgor th." th? *-'rvious :-'.r.

Russia

.. rJcnt st_.t-ment by Soviet officials sho.'-s th..t the previous esti-
mates r3l,3.ased on the 1931-52 .croe'.c .:re found to b: too high. ey are
now: reporting 5,2C1,000 acres as the areo. pl.'ntd -.'hich is 543,000 acrcs or
9.3 .per cent belo-.: the previous estimate but 1,411,000 acres, or 35.5 per
cent above the 1930-31 c.cra.ge. This acrorgc red-uction further substantiLats
the estimate of this Eur-au -.;hich placed the mnaximumr production ct 2,000,000
bales of 478 pounds or .an increase of 450,000 bales (29 per cent) over 1930-31,
although the unrevised acro.go showed ma incr:.L.se in area of 50 per cent.
/ith the possibility of still further reduction in the-reported acreage
and procurings up to Dccomber 20 for a large proportion of the area only.
60 to 70 .pr cent of the plan, it no:.; seems probable that th? production will
not exceed 1,900,000 b-i.es, an increase: of' only 23 per cent ovr 1930-31
although thl. crop ..:as at one time- officially expected to reach 2,700,000
bal)-s.

A further increase in acroa,; a:nd production is planned for 1932. A
rzc:etly approved plan c.lls for about 6,022,000 c.creo to be planted next
spring, a:i increase of 641,000 acros or 14 per c3nt over the revised 1931-32
ac r :ag:. he dec- ase in the rate of e:xpansion is said to b: duo to the
fact that according to th: plan gro-.tzr efforts :.re to be made in improving
the quality and yields.


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i








CONTEIITS


1 Summary ... *****
2 Prico s . .. .. .
3 Stocks *.nri Movo onfts . .* * ****
4 Textile Situ-tio.. . . . . * *
5 Continrnt-.l Euro.o . . . .
6 China . . . '
7- Proiluction, Acrage, and Crop Conditions . . .


lill !jillljll 111llll1 MIIl,11111111111111
3 1262 08863 1063


PAGEQ


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3- 5
5 7
7 13
13 14
14 16


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D A
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U.S. DEPOSITORY














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C-76