COTTON AND WOOL OUTLOOK                                      February 9, 1996
            Approved by the World Agricultural Outlook Board
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COTTON AND WOOL OUTLOOK is published monthly (except January) by the Economic
Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. 
CWS--0196.  
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Cotton Production and Offtake in 1995 
 
The 1995/96 U.S. cotton crop is estimated at 17.97 million bales (upland--
17.61 million and ELS--361,000) compared with a record 19.66 million in
1994/95.  According to the latest Cotton Ginnings report, 17.88 million bales
(over 99 percent of the crop estimate) had been ginned by February 1.  Final
1995/96 ginnings, as well as final upland and ELS cotton production, will be
released by USDA on May 9.
 
With production all but final and imports estimated at 100,000 bales, total
U.S. cotton supplies this season are placed at 20.7 million bales, 2.5 million
below last season but similar to supplies in 1993/94.  Similarly, total use is
projected to fall from last season's record 20.6 million bales to 17.7
million.  Based on these estimates, 1995/96 U.S. ending stocks are expected to
rise only modestly this season to 3 million bales, a stocks-to-use ratio of
only 17 percent.
 
Mill Demand Continues Sluggish
 
The estimate for U.S. cotton mill consumption in 1995/96 was lowered in
February to 10.5 million bales, 6 percent below 1994/95.  Compared with last
season's robust consumption, textile activity in 1995/96 remains sluggish. 
According to the latest U.S. Commerce Department data, cotton mill demand in
December reached a seasonally adjusted daily rate of 38,161 running bales,
slightly below the revised November rate.  Compared with a year ago, December
1995 daily consumption was 9 percent lower.
 
Cotton mill use during the first 5 months of 1995/96 totaled 4.3 million
480-pound bales.  This compares with approximately 4.6 million a year ago. 
Based on the seasonally adjusted annual rates for August through December,
cotton mill consumption averaged above 10.4 million bales.  Cotton consumption
is expected to improve over the coming months to reach the USDA estimate.
 
Although cotton use has declined about 7 percent this season through December,
manmade fiber usage has slackened nearly 14 percent.  Manmade fiber use on the
cotton system totaled 580 million pounds through December, while cotton use
reached 2.1 billion.  With larger declines seen in manmade fibers than in
cotton, cotton's share has actually risen above last season.  So far this
season, cotton's share has averaged 78.2 percent, compared with 1994/95's 77
percent.
 
U.S. Exports Up; Little Foreign Change
 
There were only a few changes in the outlook for foreign cotton this month,
but U.S. export prospects improved.  The 1995/96 forecast for foreign
production fell from 71.1 million bales to 70.7 million; foreign consumption
fell from 75.4 million bales to 75.2 million.  But larger purchases of U.S.
cotton helped raise the 1995/96 forecast for Chinese imports and U.S. exports. 
The U.S. export forecast rose 200,000 bales to 7.2 million bales.  With world
trade forecast at 27.9 million bales, the U.S. share of world trade is
forecast at 25.8 percent, down from 1994/95, but slightly above the average of
the last 5 years.
 
U.S. export commitments to China rose 230,000 bales in the last month, to 1.8
million.  China is also reportedly purchasing cotton from other exporters, and
strong sales activity suggested an outlook for higher imports than earlier
anticipated.  The forecast for China's 1995/96 imports was raised from 2.2
million bales to 2.6 million.  With no other changes in China's demand or
supply, the increase in expected imports led to higher expected ending stocks.
 
China's production forecast was unchanged despite reports of substantially
higher procurement by the government and rising production estimates for a
number of provinces in Chinese press reports.  Procurement patterns have been
altered substantially in recent years as tight supplies earlier in the 1990's
led to widespread circumvention of the procurement system.  The effect has
been to weaken the correlation between procurement and production changes. 
Also, government estimates published for total Chinese cotton production have
to date been quite close to USDA's current 20-million-bale forecast.
 
The forecast for total foreign ending stocks was about unchanged, as weaker
production prospects for India, Egypt, and Pakistan nearly offset China's
higher stocks.  The forecast for India's 1995/96 crop was reduced following a
lower crop estimate from India's Cotton Advisory Board (CAB).  While the CAB
expects larger crops this year in Punjab and Rajastahn, weaker production in
Maharastra, Gujarat, and Madhya Pradesh will more than offset the northern
gains.  India's forecast was reduced 300,000 bales to 10.7 million.
 
Cotton Prices Lower in January
 
Cotton prices declined slightly across the board from December.  The average
price received by upland producers for the first half of January was 75.9
cents per pound, down 0.5 cents from December's high through the first half of
1995/96.  Last season, the price averaged near 80 cents and climbed to over 86
cents by season's end.
 
Similarly, the upland spot price for base quality cotton slipped to 81.8 cents
per pound, the lowest in over a year.  The ELS spot price also declined
slightly, but remains more than twice the price of upland.  Due to this price
difference, ELS acreage in 1996 is expected to rise significantly.
 
Mill-delivered upland prices averaged 88.9 cents per pound in January, the
lowest since December 1994.  Meanwhile, mills are having to continue paying
premium prices for rayon and polyester staple.  During the first half of
1995/96, both rayon and polyester prices have remained unchanged at $1.25 and
92 cents per pound, respectively.  This compares with $1.09 and 82 cents per
pound in January 1995, when cotton prices averaged 95 cents.  The
cotton/polyester price ratio fell to 1.03 in January, compared with 1.24 a
year ago.
 
In January, the A Index averaged 86 cents per pound, down 1.5 cents from
December.  At the same time, however, the U.S. Northern Europe prices inched
higher.  The Memphis Territory (MT) quote averaged 94.1 cents in January,
while the California/Arizona quote was over a dollar.  Neither U.S. quote has
been in the A Index since late November.  Central Asia remains the cheapest
offering and is about 12 cents below the cheapest U.S. offering.
 
Textile Trade Declines in November
 
U.S. textile imports in November 1995 totaled 576 million (raw-fiber
equivalent) pounds, down 16 percent from October and the lowest since April. 
Imports declined in each major end-use category and for all fiber types. 
Cotton imports, at approximately 296 million pounds, accounted for more than
half of all textile imports.  November cotton textile imports were also the
smallest since April.
 
November textile exports, at 263 million pounds, declined 5.5 percent from
October and were the smallest since July.  However, November 1995 shipments
were 9 percent above the previous year.  Declines occurred in 3 of the 4 major
end-use categories, with home furnishings the exception, primarily
attributable to cotton's increase.  However, all fibers experienced reductions
in November.  Cotton textile exports, at 112 million pounds, fell 6 percent
from October but were nearly 13 percent above a year earlier.
 
Despite the monthly decline in textile trade, total textile imports during the
first 11 months of 1995 reached 7.3 billion pounds, 7 percent above the
corresponding period for 1994.  Similarly, cotton textile imports accounted
for 3.8 billion pounds, 8.5 percent more than a year earlier.  Cumulative
textile exports were also above a year ago.  During January through November
1995, total textile export shipments surpassed 2.8 billion pounds, 12 percent
above 1994.  Cotton textile exports led the way, rising 21 percent above 1994
levels to 1.2 billion pounds.
 
Overall, the textile trade deficit for the first 11 months of 1995 totaled
nearly 4.5 billion pounds, about 4 percent above a year earlier.  The
cumulative cotton trade deficit increased similarly to approximately 2.6
billion pounds.  During the January through November period, cotton accounted
for 57.7 percent of the total trade deficit, nearly identical to that of 1994. 
Meanwhile, the continuation of the strong cotton textile export demand has
once again moderated the expanding total fiber trade deficit.  In addition,
both cotton textile exports and imports will set new records in 1995.
 
The 1995 Cotton and Wool Situation and Outlook Yearbook (CWS-1995) is
available for purchase.  For information, call 1-800-999-6779.
 
The next Cotton and Wool Outlook (CWS-0296) will be released on March 12,
1996.
 
For further information, contact Leslie Meyer at (202) 501-8528 (U.S. Cotton),
or Steve MacDonald at (202) 219-1179 (Foreign Cotton).
 
U.S. COTTON SUPPLY AND USE ESTIMATES
 
----------------------------------------------------------------------          
                          
                                                   1995/96
                                         ----------------------------
Item                          1994/95     Dec        Jan          Feb
----------------------------------------------------------------------
Upland:                                      Million acres
  Planted                      13.55     16.64      16.72      16.72
    Program                    11.62     11.02      11.02      11.02
  Harvested                    13.16     15.69      15.78      15.78
                                                Pounds
  Yield/harvested acre           705       547        536        536
                                        Million 480-lb. bales
  Beginning stocks              3.30      2.59       2.59       2.59
  Production                   19.32     17.88      17.61      17.61
    Total supply 1/            22.65     20.49      20.25      20.29
  Mill use                     11.10     10.61      10.61      10.41
  Exports                       8.98      6.50       6.70       6.89
    Total use                  20.07     17.11      17.31      17.30
  Ending stocks                 2.59      3.37       2.97       2.98
                                               Percent
  Stocks-to-use ratio           12.9      19.7       17.2       17.2
  
Extra-long staple:                           1,000 acres
  Planted                        169       210        215        215
    Program                       84        26         26         26
  Harvested                      166       206        211        211
                                             Pounds
  Yield/harvested acre           974       832        821        821
                                         1,000 480-lb. bales
  Beginning stocks               227        59         59         59
  Production                     338       357        361        361
    Total supply 1/              567       421        425        430
  Mill use                       102        90         90         95
  Exports                        424       300        305        310
    Total use                    526       390        395        405
  Ending stocks                   59        31         30         25
                                               Percent
  Stocks-to-use ratio           11.2       7.9        7.6        6.2
----------------------------------------------------------------------
Based on USDA estimates.  1/ Includes imports.
 
WORLD COTTON SUPPLY AND USE ESTIMATES
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                                                   1995/96
                                        ------------------------------
Item                          1994/95     Dec        Jan         Feb
----------------------------------------------------------------------
Supply:                                 Million 480-lb. bales
Beginning stocks
  World                        26.53     29.18      28.89      28.92
  Foreign                      23.00     26.53      26.24      26.27
Production
  World                        85.63     89.54      89.12      88.63
  Foreign                      65.97     71.31      71.15      70.65
Imports
  World                        30.30     27.63      27.72      28.12
  Foreign                      30.28     27.61      27.67      28.02
Use:
Mill use
  World                        84.52     85.84      86.08      85.71
  Foreign                      73.32     75.14      75.38      75.21
Exports
  World                        28.80     28.11      27.76      27.93
  Foreign                      19.40     21.31      20.76      20.73
Ending stocks
  World                        28.92     32.16      31.68      31.77
  Foreign                      26.27     28.76      28.68      28.77
 
Stocks-to-use ratio                            Percent
  World                         34.2      37.5       36.8       37.1
  Foreign                       35.8      38.3       38.0       38.3
----------------------------------------------------------------------
Based on USDA estimates.
FIBER SUPPLY
----------------------------------------------------------------------
                                          1995                  1994
                                 -------------------------
Item                             Oct      Nov        Dec         Dec
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Ginnings                     6,163     5,866      2,916      2,904
Imports since August 1           2.2       2.2         NA        6.6
  Stocks, beginning            2,728     7,531     11,803     13,744
    At mills                     551       540        543        606
    Public storage             1,999     5,866      9,415     11,451
    CCC stocks                    20       426      1,499      2,338
 
Manmade:                                   Million pounds
  Production                   845.5     804.9      787.5      817.9
    Noncellulosic              803.3     767.8      741.1      773.6
    Cellulosic                  42.0      37.1       46.4       44.3
    Total since January 1    8,355.9   9,160.8    9,948.3    9,957.5
 
                                           1995                 1994
                                 ------------------------
                                 Sep       Oct        Nov        Nov
----------------------------------------------------------------------
                                            Million pounds
  Raw fiber imports             87.5      93.1         NA       93.9
    Noncellulosic               80.5      86.9         NA       87.4
    Cellulosic                   7.0       6.2         NA        6.5
    Total since January 1      824.1     917.2         NA      894.0
 
Wool and Mohair:                            1,000 pounds
  Raw wool imports, clean      4,860     7,445      7,656      8,116
    48's-and-finer             3,114     5,135      5,172      5,346
    Not-finer-than-46's        1,746     2,310      2,484      2,388
    Total since January 1     69,636    77,080     84,736     84,404
 
  Wool top imports               279       336        177      1,087
    Total since January 1      3,720     4,055      4,232      4,467
  Mohair imports, clean            0         0         19         37
    Total since January 1        125       125        143        190
----------------------------------------------------------------------
NA = Not available.
 
COTTON SYSTEM FIBER CONSUMPTION
----------------------------------------------------------------------
                                           1995                 1994
                               ---------------------------
Item                             Oct       Nov        Dec        Dec
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
All consumed by mills 1/         908       861        669        785
  Total since August 1 1/      2,795     3,656      4,325      4,642
  SA annual rate 2/           10,244    10,326     10,256     11,297
  SA daily rate 2/              39.4      39.7       39.4       43.5
  Daily rate                    41.3      39.1       31.9       35.7
 
Upland consumed by mills 1/      899       852        662        778
  Total since August 1 1/      2,767     3,619      4,282      4,606
  SA annual rate 2/           10,129    10,217     10,172     11,224
  SA daily rate 2/              39.0      39.3       39.1       43.2
  Daily rate                    40.8      38.7       31.5       35.4
 
Spindles in place              6,760     6,737      6,666      7,266
  Active spindles              6,310     6,220      6,111      6,824
    100 percent cotton         2,783     2,741      2,748      2,918
    100 percent manmade        1,105     1,091      1,032      1,169
    Blends                     2,422     2,388      2,331      2,737
                                             Percent
Cotton's share of fibers        78.4      78.8       78.0       77.0
 
Manmade:                                    1,000 pounds
Total consumed by mills 1/   119,929   111,278     90,715    112,299
  Total since August 1 1/    378,206   489,484    580,198    671,601
  Daily rate                   5,451     5,058      4,320      5,105
    Noncellulosic staple       4,638     4,278      3,616      4,354
    Cellulosic staple            813       780        704        751
----------------------------------------------------------------------
1/ Adjusted to calendar month.  2/ SA = seasonally adjusted.
FIBER EXPORTS
----------------------------------------------------------------------
                                          1995                  1994
                                 ------------------------
Item                             Sep        Oct       Nov        Nov
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Upland exports                 228       440        719        695
    Total since August 1         525       965      1,684      1,866
  Sales for next season            1         4         -9      2,775
    Total since August 1          52        56         47      2,874
 
  ELS exports                   17.5      12.0       14.1       14.8
    Total since August 1        35.8      47.8       61.8       48.8
  Sales for next season         12.7      18.6       13.4        4.2
    Total since August 1        13.8      32.3       45.8        4.2
 
Manmade:                                   Million pounds
  Raw fiber exports             78.1      89.6         NA       83.4
    Noncellulosic               71.1      78.8         NA       75.9
    Cellulosic                   7.0      10.8         NA        7.5
    Total since January 1      784.8     874.4         NA      825.9
 
Wool and Mohair:                           1,000 pounds
  Raw wool exports, clean      140.1     273.2      434.7        7.0
   Total since January 1     5,220.6   5,493.8    5,928.5    2,600.3
  Wool top exports           1,217.7   2,169.3    1,148.2    1,115.3
    Total since January 1    9,584.6  11,753.8   12,902.1   12,097.8
 
  Mohair exports, clean        174.9     719.4      367.8      900.4
    Total since January 1    3,079.2   3,798.6    4,166.4    7,652.1
----------------------------------------------------------------------
 
FIBER PRICES
----------------------------------------------------------------------
                                     1995            1996        1995
                               ----------------    
Item                             Nov      Dec        Jan         Jan
----------------------------------------------------------------------
Domestic cotton prices:                    Cents per pound
  Adjusted World Price         74.38     72.99      70.99      80.66
  Mar'96 futures               85.02     83.67      84.19      75.30
  Dec'96 futures               77.07     77.28      77.30         NA
  Upland spot 41-34            84.16     82.18      81.81      88.11
  Pima spot 03-46             160.75    168.48     167.61     108.88
  Avg. price received by:
    Upland producers           75.60     76.40      75.90      79.70
 
  Mill delivered:
    Cotton
      Actual                   90.58     89.70      88.86      95.17
      Raw fiber equivalent    100.64     99.67      98.73     105.74
    Rayon staple
      Actual                  125.00    125.00     125.00     109.00
      Raw fiber equivalent    130.21    130.21     130.21     113.54
    Polyester staple
      Actual                   92.00     92.00      92.00      82.00
      Raw fiber equivalent     95.83     95.83      95.83      85.42
 
    Price ratios                               Percent
      Cotton/rayon              77.3      76.5       75.8       93.1
      Cotton/polyester         105.0     104.0      103.0      123.8
 
Northern Europe cotton quotes:            Cents per pound
  A Index                      89.27     87.50      86.04     95.63
  Memphis Territory            96.95     93.38      94.13    100.31
  California/Arizona          102.35     99.63     100.56    105.06
  B Index                      85.83     82.96      81.03     96.60
  Orleans/Texas                91.50     88.38      89.38     97.56
 
Wool prices (clean):                      Dollars per pound
 U.S. 56's                      1.43      1.33       1.35      1.45
  Australian 56's 1/            1.96      1.90         NA      2.17
 U.S. 60's                      1.68      1.50       1.55      1.65
  Australian 60's 1/            2.12      2.03         NA      2.27
 U.S. 64's                      2.08      1.85       1.88      2.38
  Australian 64's 1/            2.42      2.36         NA      2.81
----------------------------------------------------------------------
NA = Not available.
1/ In bond, Charleston, SC.
TEXTILE TRADE
----------------------------------------------------------------------
                                          1995                  1994
                             -----------------------------
Item                            Sep        Oct       Nov        Nov
----------------------------------------------------------------------
Imports:                                   1,000 pounds 1/
 
  Yarn, thread, and fabric   155,016   163,879    158,583    158,101
    Cotton                    66,898    66,966     58,169     70,193
    Linen                     17,464    22,476     29,123     19,599
    Wool                       3,187     3,181      2,765      4,322
    Silk                         784       819        649        908
    Manmade                   66,681    70,437     67,877     63,079
 
  Apparel                    463,121   458,410    364,303    386,329
    Cotton                   249,619   251,267    211,833    213,810
    Linen                     16,480    17,400     11,266     16,232
    Wool                      25,687    23,438     13,821     15,001
    Silk                       9,031    10,981      8,863     12,604
    Manmade                  162,304   155,324    118,518    128,682
 
  House furnishings           35,086    35,618     28,701     28,354
    Cotton                    24,204    24,201     19,914     19,753
    Linen                        290       307        193        131
    Wool                         163       173         84        133
    Silk                          21        19         15         23
    Manmade                   10,408    10,918      8,494      8,314
 
  Floor covering              22,537    22,792     19,357     17,563
    Cotton                     4,344     4,036      3,583      3,599
    Linen                      2,904     3,280      2,884      3,065
    Wool                       6,840     6,093      4,394      3,379
    Silk                         493       362        327        439
    Manmade                    7,956     9,020      8,170      7,081
 
  Total imports 2/           682,518   687,434    576,110    595,346
    Cotton                   347,671   349,327    295,738    309,031
    Linen                     37,193    43,521     43,496     39,075
    Wool                      36,101    33,066     21,177     23,014
    Silk                      10,330    12,181      9,855     13,976
    Manmade                  251,224   249,339    205,844    210,250
 
Exports:                                  1,000 pounds 1/
 
  Yarn, thread, and fabric   122,488   126,896    121,299    116,093
    Cotton                    41,463    44,526     42,501     37,800
    Linen                      2,766     2,952      2,775      3,462
    Wool                       3,470     3,409      3,007      2,924
    Silk                       1,338     1,257      1,287      1,754
    Manmade                   73,452    74,752     71,730     70,153
 
  Apparel                    112,642   114,961    106,302     87,686
    Cotton                    66,247    68,562     62,846     53,885
    Linen                      2,319     2,223      2,056      2,195
    Wool                       4,862     4,692      4,354      3,111
    Silk                       1,869     2,015      1,735      1,488
    Manmade                   37,345    37,470     35,312     27,008
 
  House furnishings            6,902     6,352      6,873      7,403
    Cotton                     3,789     3,381      3,933      4,167
    Linen                        358       314        258        318
    Wool                         165       131        101         77
    Silk                         153       134        114        183
    Manmade                    2,436     2,392      2,466      2,657
 
  Floor covering              28,601    29,268     27,764     28,422
    Cotton                     2,856     2,909      2,943      3,550
    Linen                      1,211     1,234      1,169      1,271
    Wool                       1,290     1,446      1,396      1,424
    Silk 3/                      ---       ---        ---        ---
    Manmade                   23,243    23,679     22,257     22,177
 
  Total exports 2/           271,012   277,847    262,557    240,182
    Cotton                   114,412   119,428    112,255     99,474
    Linen                      6,665     6,733      6,264      7,261
    Wool                       9,811     9,701      8,875      7,565
    Silk                       3,360     3,406      3,135      3,424
    Manmade                  136,764   138,579    132,027    122,458
----------------------------------------------------------------------
1/ Raw fiber equivalent.  2/ Includes headgear.  3/ Absence of trade.
 
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