The Cotton situation

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The Cotton situation
United States -- Dept. of Agriculture. -- Economic Research Service
United States -- Agricultural Marketing Service
United States -- Bureau of Agricultural Economics
Economic Research Service, U. S. Dept. of Agriculture. ( Washington, D.C. )
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Bureau of Agricultiur 1 Economics ",-"r-,-,y
W.ashingtcn n

CS-19 -----------------------------------I-- V .y 26, 1938.


Manufacturers' sales 6nd output of cotton textiles in the United States

continued en a greatly restricted basis during April and early May, reports the

Bureau of Agricultural Economics. And a similar situation has prevailed in many

other important raw cotton consuming countries. In most of these foreign countries,

however, mill activity has been considerably higher in relation to last year and

other recent years than has been true in the United States.

A substantial improvL.nent in the sales of cotton goods by domestic manufac-

turers occurred during the second week of April and again about 4 weeks later. But

for the 6 weeks' period from early April to mid-May, sales were apparently less

than output. And the output has been abcut two-fifths less than the unusually high

level of a year earlier, and the lowest for the period since 1932. The continued

low level of sales resulted in a 13-percent decline in the seasonally adjusted in-

dex of domestic cotton consumption from March to April.

Despite the rather marked decline in cotton consurmytion and sales of finished

> goods by domestic and foreign mills since Novoimbur, and even though the 1937 crop

turned out considerably larger than estimated at that time, domestic cotton prices

during the first 3 weeks of May were for the most part about 1 cent per pound

above those in the first week cf IovcmbF.r.

Prices of some of the important co-npetitive foreign growths, however, have

shown much less strength than Amcricen cotton. Consequently, the competitive -

position of American is much less fav'zrLblc now than in the earlier part of the

CS-19 2 -

season. The current price relationships of these growths, however, are about

equal to the average for the 10-year period 1923-32. Despite the material

change in the relative prices of domestic and foreign cotton in the past several

months, American cotton is still more favorably priced from the standpoint of

encouraging consumption of American cotton than during most months of the past

few years.

Exports so far this season, beginning August 1, have been slightly larger

than a year earlier, and an encouraging improvement was noted in March and April.

Exports of 377,000 bales of American cotton in April were slightly lrrger than

in April last year and 25,000 bales larger than exports in April 2 years ago.

But during the first half of May exports dropped about 30 percent compared with

early May last year. Exports to Japan so far this season have been nearly 60

percent below a year earlier, even though mill consumption in that country has

been fairly well maintained. Cur cotton exports to Japan picked up considerably

in the past few months.

The first official report of acre Lge of cotton in cultivation in this

country will be issued by the Bureau July 8. At the present time, however, the

national acreage allotment under the Agricultural Cons.rvation Program is esti-

mated at about 28 million acres. This compares with the final estimate of

34,001,000 acres harvested in the United States last year. The Bureau's final

estimate of the 1937 crop was pl'ccd at 18,946,000 bales, nrd of the per-acre

yield at 266.9 pounds.

A recent report from Shanghai indicates a reduction of from 40 to 50

percent in the 1938 cotton acreage in China, with the greatest decreases ex-

pected in north China.



Domestic cotton prices strengthened considerably during the second ard
third weeks of April with Yiddling 7/8 inch in the 10 markets advancing from 8.43
cents on April 7 to 9.05 cents on 4pril 21. The price on April 21 was the highest
for more than a month and was 1-1/3 cents above the low point reached in the early
part of November. In late April domestic prices declined considerably and in the
first 3 weeks cf May the daily average price in the 10 markets was, for the most
part, a little below 8-3/4 cents, Current prices are approximately 1 cent per
pound or 14 percent higher than those of early November.

In view of the rather substantial decline in general economic conditions
in the United Statjs and many foreign ccui.tries since November, and the increase
in the estimated supply of American cotton, domestic cotton prices might have been
expected to d-cline following Nove:aber even though there was some reduction in the
estimates cf the supply of foreign cotton as the season progressed. During the
current season, ho'vver, the Government-loan program has withdrawn more than 5 mil-
lion bales of the 1937 cotton crop from urarkcting chainmels. In addition, it seems
quite likely that the enactment of the A-ricultural Adjustment Act of 1938 with
its provisions pertaining to the 1958 crop has also had an important effect upon
cotton prices.

Partly as a result of the factors tending to strengthen domestic cotton
prices and partly as a result of the decline in demand for foreign cotton there
has bcecn a rather substantial change in the ratio of the price of American ccttcn
to that of most foreign growths during the past few months.

Cn May 20 the Liverpool prices of three types of Indian cotton (,
Broach, and Sirnd) averaged only 81.6 p.rc-nt of the price of American Middling
and Lcw Middlirg compared with an average of 86.0 for the 7 months August through
February and with 87.9 percent in TVovember. The current average price relation-
ships of these growths are about equal to the average for the 10-year period
1923-24 to 1932-35b In Novembjr, however, the Liverpool price of American in
relation to Ir.di=n was mere favorable from the standpoint of encouraging in-
creased use cf American cotton than for nearly 5 years. On 1,ay 20 the Liverpool
price of Uppers -Ies lower relative to Aner Min Middling 7/8 inch than for more
than a year and lower than the for the above 10 years. In the early
part cf the current season, however, Uppers was higher priced relative to Am-
erican Middling 7/8 inch than for more than 10 years. Despite the rather mater-
ial change in those relative prices in the past several months., American is still
lower relative. to several of the important foreign growths than during most
months of the past few years.

Exports of American Cottcr in April totaled 377,000 running bales, accord-
ing to f preliminary report of the Bur'-.I u cf the Census. This quantity was cnly
slightly larger than the 373,000 bales exported in April ]937, but 25,000 bales
larger than exports in April 1936. In ':bruary and Ynrch, exports were 18 and
9 percent, respectively, lower than a y1-r earlier. In Mv.rch and April, therefore,

- 3 -



a considerable improvement was noted in the relation of exports of the current
season with those of the corresponding period last season. During the first
half of May, however, exports were about 30 percent smaller than a year earlier.

In view of the rather marked decline in cotton consumption in foreign
countries during the past several months, the more favorable showing during March
and April offhand might seem particularly encouraging. It should be remembered,
however, that the 1937-38 domestic supply of Amnerican cotton was about one-
fourth larger than that of the previous season and prices sc far this season
have been 15 to 37 percent lower than in the corresponding months of last sea-
son. Furthermore, during the past 2 months, exports to Japan were only 60,000
bales (or 21 percent) less than in March and April last year, whereas during
the first 9 months of the season total exports to Japan were 800,000 bales (or
59 percent) below a year earlier. It is expected that, during the remainder of
the season, exports to Japan will make a more favorable showing in relation to
a year earlier than was the case during the first 6 or 7 months of the season,
inasmuch as the unusually large August 1 stocks in Japan have been reduced to
about the minimum even for the current restricted rate of consumption. The show-
ing, however, may not be nearly so favorable as in March and April.

For the 9 months ended April 30, total domestic exports amounted to
5,034,000 bales compared with 4,762,000 bales from August 1936, through April
1937. During this 9-month period, exports to the United Kingdom totaled 1,473,000
bales which was 450,000 bales or 43 percent larger than exports in the first 3
quarters of the 1936-37 season. Exports to France, Italy, Germany, and a number
of other countries were slightly to su.stintially higher than in the corresponding
period last season. A large part of the increased exports to these countries,
however, was offset by the decline of approximately 800,000 bales in exports to


UNITED STATES: Manufacturers' sales and output of cotton textiles
continue on greatly restricted basis

Despite the improvement in manufacturers' sales of cotton textiles in the
first half of April, it appears from trade reports that, for the month as a
whole, such sales were probably no more than -- and may have been less than --
the greatly restricted reduction. The same appears also to have been true for
the first half of May, even though a substantial improvement in sales was noted
in the second week of May.

Total United States mill consumption of raw cotton in April amounted to
414,000 bales. This was 42 percent less than in April 1937 and the lowest for
that month since 1932. The Federal Reserve Board's index of cotton consumption
in April, adjusted for seasonal variation, was 77 percent of the 1923-25 aver-
age. This was 13 percent less than that for March and 47 percent under the high
point in December 1936. Consumption from August through April totaled
4,438,000 bales which was 1,600,000 bales or 26 percent less than the record


consumption in the first 9 months of last season. Last month it was stated
that it seemed quite likely that the average daily rate of consumption for
the remainder of the season would be within 10 percent of that for March and
if so, domestic consulmption for the 12 months ended July would total between
5,700,000 and 6,100,000 bales. And this seems to be a reasonable expecta-
tion in view of developments during the past month.

EUROPE: I/ Cottcn textile sales and output reduced; stocks larger

April reports from European cotton industry centers have been of an un-
favorablc tenor. The most comvjcn cause of complaint has been the growing
evidence of receding export demand for finished goods, which has led to keener
competition, price cutting, increasing stocks of goods, ard, in some countries,
to furtherrecessions in mill activity.

The United Kingdom:- The cotton industry in Great Britain during
April experienced lower prices, diminished mill employment and much smaller
delivt'ri s to spinners. Deliveries were smaller in volume than in any April
since 1931. At the reduced prices now prevailing, however, inquiry for goods
was slightly improved, at least for the home trade and occasionally for the
expert trade as well. But the general export outlook is far from encourag-
ing, both for demand and competition. Spinners appear to have sold a rela-
tively snall part of their full-time production in April, although mainly
because of reduced output unsold yarns are not believed to have accumulated
es rapidly during the month as was true a month or two earlier.

American cotton in Grcat Britain has not felt the impact of the ad-
verse developments in recent months to the same extent as other growths.
Nearly half of the volume of cotton delivered to British spinners during the
past 9 months has been American. The exceptionally hcavy imports and
stocks of American cotton are nn indication that spiinxiers will continue to
use liberal proportions of American during the coning months.

Current statistical indica'tors show definite deterioration in the de-
mand situation in the United Kirgdom. Weekly forwardirgs of cotton to mills
in April fell to the levels expected in the dull weeks of summer, and in the
middle weeks of April were at a rate less than half that of a year ago. Un-
employment ir. the cotton textile industry further increased in the face of a
slight improvement in the country's industries as a whole, and further stop-
page of mills was reported,

1/ Based largely on a report prepared by Llcyd V. Stcerc, Agricultural Attache,
Berlin, Germany, May 5. Infor-ation on the United Kingdom supplied by C. C.
Taylor, Agriculturfl Attache, London,

- 5 -0


Another unfavorable development durin: the nonth wv.s an increase e in
E7ptian duties on imported textiles rT-i) fro 70 t) 10C percent, which
for the time bein- has brou-:ht new busi_.ess- with that country virtually to
a standstill, Althou7.-h the volume of imports of British cott-n textiles
into Eg:rpt was second to Italian, in 1937 ranked fifth -.mon. British
export markets for cotton piece-,-ods. The tariff increases hp,'vc occasioned
concern for the future of the trar'e, anld representations to tie British
Government hca:.-e been made in an effort to bring about a r-consi.eration of
the j.,--yptian action.

Also of importance is the announcement by the Bo.-..rd ,f Trre of
April 13 that:-

"In conr-.ction with the negotiations for a
new trade agreement between the United Kin.--?on and.
India, a delcg.ation representing the Unite. Kinr.con
cotton industry are leavin,- for Ir.iia on the 21st of
April at the invitation of the Goveri.m-.-nt of India, to
enter into discussions with the unofficial P'visers to
the Inr-.i-n Tri"'.e Del.-ation with a view to at
a basis of t,"recnnt which would. be satisfactory to the
cotton int'luqtries of the two countries and w.hch could
be submitted for'the consideration of the two 5ov.;rrL.ents."

en'-.- R,-o,rts from the G-rmarn cotton textile industry; showed a
continue-. hi;h level of activity in Irrch and early r-d ; r.ctive de-
mand from the hone "'-'ket. Manufacturers of staple fabrics l.u'.-ely consumed
by low-incone rvi',s even ini'licr.t3'. an "extren-ly stron; enc pressin&- den-nd'l
beyond their cr-..prcity to satisfy on the 'c.sis of existing raw m.-terial quotas.
More variable conditions exist in the specialty 'rPnches, particularly those
influenced by seasonal factors; 'rut unsnatisfactory reports -re rare.

On the other hand, sims of less favorable developments in export
business were r-ported. April reports indie ate a rather frenerpl recessive
tendency in both new ord-ers for et7ort and in calls und&3r )Ll. contracts. The
small volume of new business booked w,-.s at very unsatisfactory prices an-f
under pressure of increasingly strong co:"r.etition from countries with de-
preciated currencies.

Germany hp.s striven with marked. success durin- the p-Ist 3 ye-ir of
textile raw mrvterial sh-jrt-.-.- to build up cotton textile c.xports t- hI'elp pr.o-
vide foreign cxcl-an:;e to buy r-.%. material. In 1937, her exports of finished
and unfinislie. cotton cloth were sufficient to cover 40 ricrcent (1.3 35
percent) of her outlay for imports of cotton, cotton waste -nd reclaimed cotton.
And if cotton textile exports should suffer a seri-us -cuartailment, a. renewal
of tension in the German raw mniterial situation, which existed prior t' the
past several months, rirht e-.sil.:r esult.

- 6 -

- 7-

The Austrian textile'-try, -,h3 .r the rner.':er of Austria with
Germany, has been suddenly confronted with the necessity of adjustment to
a completely new set of circuLmistrices in all its brr-,ches. In the first
place, it has been flooded with a wave of orders and inquiries from Gern-iny,
and what appears to be a sudden surge of domestic bbuyin.- in anticipation of
possible shortnes incident to the incorporation into Geriinyn. As a result,
the larger firms are reported to be reservin. a portion of their output for
old customers and acceptin. new Ger'un business with a certain reserve and
an eye to its possible p ,in..anuincy. In the second, place, the industry has
had to immediate preparations for early -djustment to entirely new
raw material supply conditions. The situation seems to be uncertain in view
of the difficulty of placing Austrian spinr.ers at once upon a parity with
Germ-.n spinners. Finally, trar.'fl and distribution are r.-irted to be in a
disorf;anized state-bcc!--'.e of th. wholesale introduction of a maze of new
regulations ,n.i restrictions affecting both domestic and export business,
and by the drive to eli:.:inate JeTsw from the textile in which they
have lone. pl-ye. a lcaiir- role.

C7.ecbh o.s'.i-..- Information avail.Kle during April on recent develop-
ments in the cotton industry was rather .--ncrally unfavorable in tenor, and
textile circles are pessimistic about the outlook. The index of cotton
spinning activity drorve-d from '90 in No-umber to 74 in January, and it is
reported th.t still further declines occurred in February and March. It is
further reported that ATril r-q-,parently brought little improvement. The de-
cline in textile exports that be-_-i late in 137 has continued, and a further
recession is regarc'er as more or less inevit!'r.le as a result of the Austrian
"Anschluss". Egypt s recent large increase in cotton goods duties is also
regarded as ap. heavy blow to Czech print goods.

Some seasonal imTro'vement was recently experience in the garment
trades and other specialties, and more is expected, but otherwise there seems
little grour-nd for encouragement. The textile industry re,'-:rds the betterment
of Czech-German trade arrangements as a first essential for halting the
recent drop and brinrino ab-,ut a recovery. The Czech industry above all is
concerned with maintaining its extensive tr.ij in both semi-finished and
finished g--ds v:ith former Austria thou-.K. it obvi uslr fears that at least
a part of this must be regarded as lost.

Czechoslovakia hm.s concluded a -rcerient with Turkey, effective
May 1, l133. In the new agreement, cotton yarn is removed from the free
list a n. in the future can be sold to Turkey only on a barter basis against
cotton. Tne Turkish import contirneent for Czechoslovakian cotton goods was
likewise increased by about 30 percent. The treaty furthermnore,,permits
private barter transactions in CzechoslovpkI -i cotton an.d wool goods outside
of the c~ntin-ent P.Fainst Turkish cotton, wool, mohair, afl. ens. It is to
be assumed that this 2greemont will have at least some effect in the direction
of increasing Czechoslovakian imports of Turkish cotton. But it may also
tend to reduce ex.-ports from Turkey to other countries.



,- 1 .

France.- Fren-h cotton spinners frund of A a.'il a cpl,. month
for new business, with production tending to outrun rlers.n -eliveries.
As a result, stocks tended to rise. During the cec-rnd h2lf .-f the month
prices declined, and this brought a certain an,-,': :.f 'ru:--: enabled
some mills to reduce stocks. Hand-to-mouth business, hox.,'.vr, continues
to characterize the situation in -?rns.

TIhe cloth mills seem to h,-.e done :cn rally better business than
the spinners during April, ever in the second half of the month. Export
business was sporadicll..y active, notably in colored fabrics, with French
weavers apparently enjoying a certain aidv>ita,:e over othez c,,nt0ries as a
result of the downward drift of the franc. Prices, howe-.-er, tl';u.-h steady,
hav--e not been satisfactory, and compe-Itition was obviously keen.

Italy.- The latest information indicates that the It.clian co-tton
industry, after reaching record levels of activity in lat- 1937 and early
193 is probably headed for something of a recession in the near future
unless .n early and, nnrrkJ., improvement occurs in e:port an.'d '.-rmestic demand
for cotton goods.

The demand outlook, however, is not encour-,-irig, -.t homo or
abroad, Italy appears to be facing- ap poor ye.-.r, agriculturall.., in the
northern parts that will almost certainly Je'tress home tr,:-.' t. ru appreciable
extent. An uinpreccdentedc drought that will .r .ly reduce cereal yields
throuThout the north has been accompanied by sever2.l periods of freezing
temperatureo.tha~thavae W-kun h.F-vy.toll amon.- -Ittalyks& imp-rt'.uat -fruit and
vegetable industry in that area, which is the most important part from an
a-ricultural and population st-.n-point. In the central .nd s-.uthern regions,
conditions -rpear to be more norm-l.

The c',: the prospects for a period of materially incr.,ased copetition frorn other
cotton textile exportin.- countries. Reports from Eni'lriia, Gerrn-tny,
Czechoslovakia, Bel-ium, and _Fr.nce all point to the i::cre-sinLrc difficulty
of export sales, and to price cutting ; or at least great -ressuire on prices.
Moreover, demand is tendin, to dwindle in some export m-rkcets incident to
trade recession. And special circumstances in some countries ?re unfavorr ble
from an Italie_. standpoint, such as Em-t's recent larL. incr-ose in duties
on cotton goods. The rarkut outlook in the Balkans is also rug-rded as
affected by Germany's growin.x influence in that area.

These factors thus seem to point to decreased c'-nsurmpti n Fn?. im-
ports of raw cotton in coming months. The likelihood of a decrease in con-
sumption is also str-n-thened by the st:adily increa-sing substitution of
other fibers for cotton, the development of which is strikin,;ly shown in
the accompr-inying table,


Italy: Quantity of cotton and other fibers used in weaving mills,
monthly averages, specified -periods

Cotton Artificial fibers. Other fibers Total
Period : :As a per-: :As a per-: :A.s a per-:
: Actual :centage : Actual :oentage : Actual :centage : Actual
::of tctal : :or total : :of total :
:1,000 lb. Pet. L1,0.0 lb. Pct. 1 l000 lb. Pct. 1,000 lb.

1934 ... 19,691 88.8 1,556 7.0 925 4.2 22,172
1935 ... 19,925 34.1 2,152 9.1 1,616 6.8 23,693
1936 ... 15,170 73.5 3,446 1E.7 2,012 9.8 20,628
1937 ... 16,025 62.5 6,160 24.0 3,466 13.5 25,651
1937 .. 14,385 66.1 4,956 22.8 2,420 11.1 1,759
1938 .. 14,725 60.7 6,843 28.2 2,685 11.1 24,253

Furnished by the American Consulate, Milm, quoting6 Bollrtino tensile, supra
p. 207.

The U.S.S.R.-The output of the cotton textile industry of the U.S.S.R.
during the first 3 months of 1958, is reported to have lagged. The quarterly
plan is reported to have been exc.cuted only to 98 -.ercent, with total output
reported 118,700,000 yards short of the plan. The plan, therefore, was
apparently about 988,000 ;eOO yards -and the actual output approximately-..
869,300,000 yards. Output during the same 3 months last year was estimated
at 715,000,000 yards.

ORIENT: Situation in China improve, mill activity in India high
but developments in Japan continue unfavorable

China, 2/ including MAnchuria.- The Burau's Shanghai office reports
a slight gain in cotton mill activity in China during April. Total mill
consumption of raw cotton vlas estimated at 120,000 bales compared with
110,000 bales in March and 85,000 in Jmanuary. The estim:Ited consumption in
April is equivalent to an annual rate of 1,440,000 balcs, assuming no
seasonal variations and no variation in the number of working days per month.
This compares with an -stimatced mill consumption of nearly 3,100,000 bales
during the 12 months ended July 1937 and is much higher than the average
annual rate existing during the first 8 months of the season.

The Shanghai yarnn market was rather strong during April, especially
for yarn produced byr Chinese mills. As a result, the Chinese mills at
Shanghai and IIangkow: were reported as having made exceptional profits.
Most of the Chinese y-rn ws shirpped .to South China and a part of it is
said to have found its wvasy scmc disVtaic* into the interior. The yarn pro-

2/ Based largely on r-diogrn7s rcccived on Mey 12 :nd 13 from the Shanghai
office of the Bureau of Agricultural Economics.

- 9 -


duced by Japanese mills in China was mostly shipped to North China with
only a small amount being exported to the South or to foreign ports.
Some progress is said to have been made during April in rehabilitating
damaged Japanese mills.

Total stocks of raw cotton at Shanghai at the end of April have been
estimated at 200,000 bales which it is estimated is equivalent to 5 months'
consumption at the existing rate. All but 20,000 bales of this cotton was
estimated to have been grown in China. Chinese cotton continued to arrive
at Shanghai in small quantities, most of ,-hich came from ar,.as occupied by
the Japanese. The -insnttled con'diition made transportation very difficult
and irregular.

The Americrrn Consul at Tsingtao reports that a group of 12 Japanese
firms dealing wxvith cotton have formed an -ssociation called the Tsingtao
Cotton Traders' Association, its main purpose being to develop cotton
production in Shnngtung and control the exports of cotton to Japan. The
authorized capital of this Association is 500,000 yen ($145,000). The
Association, it is reported, has been buying some cotton from Shangtung
farmers, at prices reported to b a-iround 20 percent less than for the 1936

Reports continue to indicate a material reduction in the 1938 Chinese
cotton acr(.age with recent estimates r'-nging from 50 to 60 percent of last
year's zcreagc. Th, greatest decreases are expected to occur in North China
in the areas of present hostilities. In the event the 1938 acreage is re-
duced 40 to 50 percent from that of 19.7, the decline in production might
more than offset the increase in carry-over on August 1, 1938.

India.- Cotton mill activity in India continued high through April.
The 190,000 equivalent 478-pound balcs of Indian cotton used last month
were 4 percent larger than in April 1937 nd established u nwv high for
that month. This made the tenth consecutive month in which the quantity
of cotton used exceeded that of any corresponding month on record. For
the 9 months, August to April, cotton mills in India used 1,765,000 bales
(equivalent 478 pounds each) of Indian cotton compared with 1,540,000 bales
in the like period last season. In view of the record established during
these months, it seems quite likely that *?onsu:mption for the 12 months
may establish a new high for the August-July season. It ic net expected,
however, that consumption in the last quarter of the season will be as
favorable as in the first 3 quarters. The highest consumption for any
season thus far was in 1935-36 when 2,150,000 bales (equivalent 478 pounds)
of Indian cotton Were consumed.

The high level of Ir.di-n mill consumption during the current season
has been due, in part, to reduced imports of cotton piece goods. Total
imports of all kinds of piece goods (excluding fonts) into India, excluding
Burma, in February, the most recent month for which data are now available,
were 1 percent l1rger than a year earlier, but 20 percent less than in
February 1936. For the 7 months ended February they were 4 percent less
than a year earlier and 23 percent less th-n 2 years earlier.

- 10 -

CS-19 11 -

Japan 3/.-Reports indicate that JFrrin's d"ffi.eulty in oLtrining
foreign exchange w.-ith which to purchase raw cotton and the difficulties
encountered in selling cotton tcxtil,,s focr erTnrt, continued to restrict
the consumption of raw cotton by Japanese rulls luring April, compared with
the early part of the season and with a ye-ar 'marlic-. Since no improvement
in this situation seers likely during the i.onths irn1rdiatJ.y ahead, it is
expected that consumption ,rill continue on a restricted basis throughout
the remainder of the season.

The reported production of yarn by Japanese mills indicates that
mill consumption of r.w cotton in April totaled abcut 2b5,000 l'les of
478 pounds. This apr.-.ars to bu about 8 percent lrger than the quantity
consumed during each of the 2 pr3cf months, but c.bolut one-fourth less
than in the correspon(iing period l-st ye?.r ,nd 22- percent low. r than the
average consumption during the first qu.rt r of the current .: .rson.
Despite thD fact that consumption during the rern-.indE-r of ti-w s.'son. may
average about one-fourth lers th-an during the corrosronding p'iiod last
season, total consurr-tion for the 12 months ended July seem(rs likely to
total about 3,300,000 bales or slic-htly norc. Tnis is onl: 10 p rccnt less
than in the 1936-37 sec.son. Exports of cotton cloth from JT3.-.n in April
were 8 porcunt more and 7 p.-rci.nt Is, rspfrctivcl:]., th-n in April 1937
and April 1936. For the 9 months Aur-ust through April, hov.'ev:r, total cloth
exports only 1 ocrcrnt less th.-n in the ?orrr spor.ding period of the
preceding season.



The. revised acreage .rnd production urti-rt-'s -s rclpasod by the Crop
Reporting Board M"-y 25, placed the l' 27 United St' tus. production at
18,946,000 bales of 500 pounCs gross (478 ncounds net) with the
December estimate of 18,746,000 b1-.-s, -, revision of 1 percent. The
estimate of the area harvested vwjs r vised from 35,0C ,C'00O !.,cres, as
estimated in December, to 34,001,000 .res, ith the fin.1 Lstimate of
yield per acre placed at 266.9 pounds.

Thesu estim.-.trs arc shovm in comparison with final -.stimr.ates for
several earlier y,-ers in thit. u-conpanying tab-iletion.

: : Acrcage : Acreage : Yi .Id per acre
Crop year : Production : plrated : hrvosted : hdrvested

:1,00C balcs of 1,000


: 500 Ibs.,ro'-s :crE. s shares Pounds
5-yr. average
1928-32 ....... 14.667 4 ,424 41(,541 175.9
1933 ...........: 13,047 40,24,8 29,383 212.7
1934 ............. 9,636 ?7,3C0G 20,866 171.6
1935 ............ : 10,638 '- 8, 197 27,640 134.2
1936 ......... .. : 12,599 19G ,903 1.., ,0>"8 197.6
1937 ............ : 18,946 "4,7 :71 __ C,001 266.9

3/ Based primarily on radiograms of May 18 *-nd 20 -aid from the Bureau's
Shanghai office giving data furnished by American Consul Kcnncth C. Erantz
at Osaka.

l~i HIIIBBl ii iiI 1111111lllll~ III
3 1262 08900 4195
OS-19 12 -

The most recent trade estimates of probable 1935 cotton acreage
are about in line with the reviser-. acreage allotment of the Agricultural
Adjustment Administration. Private estimates of the United States acreage
released since the first of May, fall between 25 and 29 million acres.
This compares with the most recent estir.,ate (which is still only preliminary)
of the national acreage allotment, is determine under the provisions of
the amended Agricultural Adjustment Ac'; of 133', of 2,0OO,000 acres.
The acreo.e allotment is 19 percent less than th'iP 1937 planted acreage and
18 percent less than the 19537 harvested acreage. It is 32 and 31 percent,
respectively, less than the estimated averse acreage planted and harvested
during the 5 years 192'-32. 3ther c mparirons ',ay be made from the above
tabulation. The first official report of cotton acreage in cultivation in
the United States will be issued by the Cr-)p iReporting Board on July S.

The U. S. S. R.- The cotton pl -.tin,. c-.mpign is now well underway,
with the latest figures indicating aho-t 37 percent of the plan put in by
the middle of April as compared with q19 percent by the s-?ne date a year ago,
or 1,905,000 acres, as comraroed rith 9 C,000 in 1937, 1,1.,000 in 1936
and 1,1Og,000 acrus in 1935.

April weather c-nriitions v:cre reported faorable, '-ith warm )r hot
weather throughout the month, cintra.ry to last year when a sudden return of
cold weather damaged early plartec. fields. Rapid melting of th. mountain
sniw is also reported, i7hich. is import-nt as a source of water for the
irrigation system.

China.- Accorlin,; to a recent report fro-)m Agricultural C-iamissioner
0. L. Dawson at Shini-hai, the indications are tn-t the 193S Chinese cotton
acreage will be very rmateri-.lly reduced. It is stated that recent esti-
mates indicate an acr-ea:e only 50 to 6cO percent as large as the 1937 acreage.
The 7,reatest decreases are expected t occur in North China. (See pages
9 and 10 for a mere complete discussion.)

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