COTTON AND WOOL OUTLOOK                                         May 13, 1998
May 1998, CWS-0298
               Approved by the World Agricultural Outlook Board
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COTTON AND WOOL OUTLOOK is issued five times a year by the Economic Research
Service, U.S. Department of Agriculture, Washington, DC 20036-5831.  
Electronic release only; no printed copies available.  
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HIGHLIGHTS

o  Smaller U.S. Crop and Lower Stocks Projected in 1998/99
o  Foreign Cotton Consumption To Rise, Stocks To Fall in 1998/99
o  Special Article--California Cotton Planting Progress:
   Are There Implications for Yield?
o  Special Article--Growing Demand for Cotton Products in Developed Countries

Smaller U.S. Crop and Lower Stocks Projected in 1998/99

The first official USDA forecast, based on the March Prospective Plantings
report, projects the 1998/99 U.S. cotton crop at 16.7 million bales. Planting
intentions indicated cotton area at 13.2 million acres this spring, and
assumptions of average abandonment and yield were made in reaching the
production forecast. Projected harvested area of 12.3 million acres is based on
the 1988-97 national average abandonment rate, and the projected yield of 650
pounds per harvested acre is based on the 1993-97 U.S. average. If realized,
the 1998 U.S. cotton crop would decline 11 percent from the final 1997
production of 18.79 million bales.

With U.S. cotton stocks estimated at 3.8 million bales at the start of 1998/99
and total demand projected to exceed production, stocks are likely to decrease
next season. In 1998/99, domestic mill use is projected unchanged at 11.5
million bales, as rising textile imports are expected to offset growth in
retail cotton consumption. On the other hand, U.S. exports are projected to
decline 20 percent to 6 million bales as a result of tighter U.S. supplies and
more foreign competition. And with world trade projected near the 1997/98
level, the U.S. share of global trade is likely to fall to around 23 percent in
1998/99. Based on these initial U.S. cotton supply and demand projections,
stocks would decline 800,000 bales to 3 million by July 31, 1999, a
stocks-to-use ratio of only 17 percent.

As of May 10, cotton planting progress was running behind both a year ago and
the 5-year average. Forty percent of the crop was planted as of May 10,
compared with 41 and 46 percent, respectively, for last year and the average.
Cool wet weather in several States have caused planting delays. Perhaps most
notable is California, where only 60 percent of the acreage is reported
planted, compared with a 5-year average of 91 percent (see special article on
California planting progress). Other States that are more than 20 percentage
points behind their average include Georgia, South Carolina, and Tennessee. In
contrast, four States are running ahead of their 5-year average. These include
Texas, Oklahoma, Alabama, and Arkansas.

Foreign Cotton Consumption To Rise, Stocks To Fall in 1998/99

While foreign cotton production in 1998/99 is forecast unchanged from the year
before at 69.8 million bales, consumption is expected to rise 1.5 million bales
to 78.5 million. At the same time, U.S. exports are projected to fall 1.5
million bales, due to both reduced production and increased competition from
higher foreign stocks. As a result, the increased gap between foreign
consumption and production will be met from foreign supplies rather than from
U.S. exports--foreign exports are rising by 1.6 million bales to 20.2 million
and foreign stocks are falling by 2.7 million bales.

Foreign cotton production should be about unchanged from 1997/98 due to
offsetting changes in major foreign producing countries. For example, a record
yield in China during 1997/98, combined with an unprecedented reduction in the
officially guaranteed procurement price suggest China's 1998/99 crop could be
lower. On the other hand, a plunging yield in India during 1997/98, combined
with substantially higher prices for cotton in India, suggests India's 1998/99
crop could be higher. In each case, however, there are further offsetting
factors that suggest smaller changes for production in 1998/99 than lagged
price changes and average yields alone would suggest.

Yields in both countries are notoriously hard to predict due to the role of
weather in India and the lack of policy transparency in China. During 1981-97,
India's yields were about twice as variable as U.S. yields, as determined by a
ratio of yield standard deviation and yield mean. There have been occasions in
the past when weather-reduced crops in one year have depressed cotton area in
India in the next year. The most recent prominent example was a 7 percent area
decline in 1987/88 following a 13-percent drop in yields in 1986/87. Yields
fell 17 percent in India compared with the year before in 1997/98, the largest
such change since 1955/56.

The variation in China's yields was only slightly larger than for the United
States, but early-season China forecasts published by western observers have
fared poorly in recent years. Official statements from China have suggested the
government there expects a crop of 18.4-19.7 million bales in 1998/99, and the
mid-point of published forecasts by western observers is probably lower. Partly
offsetting the negative effect of China's lower cotton procurement price are
falling market prices for competing grain crops and a slowing economy which may
be reducing returns to horticultural crops and decreasing the opportunity cost
of labor. The cotton procurement price in Xinjiang can fall more than the 12
percent decline sanctioned for the rest of the country. But, Xinjiang's
irrigation capacity continues to grow, and competing, lower valued crops might
not be profitable to ship to eastern markets.

Finally, the lack of transparency with respect to China's timeliness of
payments to farmers, local taxes, local subsidies, administrative guidance, and
lending policies means significant factors can be easily overlooked. China's
cotton crop has been below 19.3 million bales only once during the 1990's. In
1993/94, production fell to 17.2 million bales as the preceding season marked
the beginning of the North China Plain's bollworm infestation, and grain prices
soared following government liberalization in 1993.

Consumption Growing Near Normal Rate

World mill use of cotton is forecast to grow 1.6 percent compared with a year
earlier to 90 million bales, slightly below the long-run growth rate in USDA's
baseline forecasts. Since no growth is foreseen in U.S. mill use, all the
forecast increased consumption occurs outside the United States. Most
macroeconomic forecasts predict negative GDP growth for Southeast Asia and
South Korea in calendar 1998, with rebounding GDP growth in 1999. If, however,
liquidity problems hinder the recovery of their textile industries, other
countries can be expected to benefit from reduced competition from Southeast
Asia, suggesting that world cotton consumption will grow at a near normal rate
during 1998/99 (see special article on cotton textile consumption in developed
countries).

Trade

World trade is forecast unchanged from the year before in 1998/99, at 26.2
million bales. While U.S. exports are expected to be down, foreign exports are
forecast to rise as competitors draw down the stocks built up during 1997/98.
China appears likely to be a competitor on world markets in 1998/99, although
it is not yet certain if China's 1998/99 cotton exports will exceed its
imports. China has moved to reduce its imports in recent months, but will
probably continue to permit some joint-venture purchases from outside China,
and the use of some imported cotton by state-owned mills cannot be ruled out.
The biggest uncertainty is the possibility of further export tenders:  how much
of the 9 million bales that China added to its inventories from 1994/95 to
1997/98 is going to be consumed domestically, how much will remain in
inventory, how much is unspinnable, and how much will have to find another
outlet.

Mill Use Estimate Unchanged for 1997/98

The U.S. cotton mill consumption estimate remained at 11.5 million bales for
this season. Based on data from the U.S. Commerce Department, March consumption
averaged 44,700 statistical bales per day, slightly below the revised February
figure. On a seasonally adjusted annual rate (SAAR) basis, March mill use
equaled 11.40 million bales, compared with February's 11.42 million. However,
for the season to date, the SAAR has averaged 11.5 million bales. Actual cotton
mill use during the first 8 months of 1997/98 totaled 7.6 million bales. This
compares with 7.3 million bales consumed at this point last year when the
season's use surpassed 11.1 million bales.

Cotton Prices Lower in April

U.S. cotton prices moved lower in April with the exception of the ELS spot
price which averaged one cent higher during the month. New crop prices averaged
nearly five cents lower in April than in March. The December 1998 cotton
futures contract averaged only 69 cents per pound in April. In addition,
weather-related planting problems may force some cotton producers to an
alternative crop, despite recent lower prices for competing crops. This may
keep cotton acreage from reaching the March Prospective Plantings indication.
The first survey of actual acreage planted to cotton will be published in the
Acreage report released on June 30.

Textile Trade Deficit Increases in 1998

February textile exports, at 369 million pounds (raw-fiber equivalent),
increased 9 percent from January and were 46 percent above February 1997.
Overall, textile exports were higher for all major fibers and all end-use
categories. Cotton textile exports rose to nearly 154 million pounds, 10
percent above January and 40 percent above a year ago. Shipments to North
American countries accounted for 80 percent of the total. Mexico, Canada,
Honduras, and the Dominican Republic remained the largest buyers of U.S. cotton
textiles and apparel. Compared with a year earlier, cotton exports increased to
all other regions except Asia, where lower shipments primarily to Japan limited
gains.

Textile imports totaled 779 million pounds, down 2 percent from January, but 14
percent above a year earlier. Overall, imports decreased for all major fibers
except cotton, compared with a month earlier. Cotton imports, at 436 million
pounds, accounted for 56 percent of total imports in February and were 2
percent above January. However, textile imports during the first 2 months of
1998 were 11 percent above the corresponding period of 1997, and cotton textile
imports were up 17 percent. Asian textile-producing countries remain the most
important source of cotton textile imports, accounting for 50 percent in
February 1998. However, North America continues to increase market share of
cotton textiles, accounting for 39 percent of all cotton shipments, compared
with 36 percent in February 1997.

For all fibers, the textile trade deficit during January and February totaled
865 million pounds, 10 percent above a year earlier. The deficit increased for
cotton, wool, and manmade fibers. The cumulative cotton trade deficit was 20
percent higher than the first 2 months of 1997. In addition, cotton's share of
the trade deficit increased from 57.4 to 65.9 percent.

Special Articles:

California Cotton Planting Progress:  Are There Implications for Yield?
by Leslie Meyer

The U.S. Department of Agriculture collects and publishes data on the planting
progress and condition of major U.S. field crops. Cotton plantings are reported
weekly beginning in early April and continue through mid-June for most years. 
Planting progress for individual States is measured and aggregated for the U.S.
total. For cotton, data from 14 States account for about 98 percent of total
cotton acreage annually.

Past experience suggests that factors which affect the cotton crop as it
develops--such as weather, diseases, and insects--inhibit identification of a
statistically significant relationship between U.S. cotton planting progress
and the national average yield. However, a smaller, more homogeneous area could
perhaps permit identification of this relationship. One such area is
California, with its desert climate, low abandonment, complete dependence on
irrigation, and other similar cultural practices. Even with an earlier
allowable planting date this year, cool wet weather associated with El Nino has
kept California producers from getting their cotton crop planted in a timely
manner. In fact, reported planting progress is well behind what historically is
"normal" for California (Table 1).

State data from Weekly Crop Progress reports for 1987 through 1997 were
analyzed to determine the relationship between California's cotton planting
progress and the State's upland yield.  Of particular interest are the
implications of the planting delays experienced thus far in the 1998 growing
season for California's yield potential. A double log function was estimated
with ordinary least squares (OLS) regression to explain California yields. The
estimated equation is shown in Table 2, where LN(Y) is the natural log of
California yields per harvested acre and LN(X) is the natural log of the
cumulative percentage of California cotton planted nearest to May 10 of the
respective years. The coefficient for the percent planted is positively signed,
as expected, and statistically significant. The associated t-statistic is shown
in parentheses below the coefficient. The equation accounts for 63 percent of
the variation in California's upland yield over the period analyzed.

Based on the results of the OLS regression, a projection for California's
cotton yield for 1998 can be calculated which incorporates the percent planted
as of May 10, 1998, as reported in the Weekly Crop Progress and indicated in
Table 1. Inserting the percentage planted into the equation indicates a 1998
average upland yield of 931 pounds per harvested acre. With the standard error
of the estimate equal to 0.068596, chances are two out of three that
California's upland yield will range between 865 and 997 pounds. While these
yield estimates are well below California's 1987-97 average upland yield of
nearly 1,200 pounds, a similar divergence from "normal" planting progress
occurred as recently as 1995. Cotton planting was also reported only 60 percent
complete as of May 8, 1995, resulting in the same in-sample yield projection of
931 pounds per harvested acre. Subsequently, California's final upland yield
for 1995 fell within the range noted above, averaging a relatively low 953
pounds.

Will California's 1998 upland yield fall within this range?  The answer, of
course, will not be known for several months. Although many factors affect the
cotton plant's development and potential, planting progress in California seems
to be a significant factor influencing yield. To illustrate this, actual yields
were examined when planting progress was reported 95 percent complete near May
10. During the 1987-97 period, 5 years were assessed to be 95 percent planted
at this point of the year. Based on the model presented here, the expected
yield was 1,221 pounds per harvested acre, with a standard error around this
yield producing a range of 1,134 to 1,308 pounds. Actual yields fell within
this range in 3 of the 5 years when planting was 95 percent complete near May
10. California upland yields varied between 1,153 and 1,359 pounds per
harvested acre during these 5 years, with 2 years outside the upper bound and
having the largest yields on record.


Table 1--California Cotton Planting Progress.
-------------------------------------------------------
Date           1998          Normal
-------------------------------------------------------
                     Percent
April 5         5             18
April 12        6             32
April 19       10             51
April 26       25             70
May 3               45             84
May 10         60             92
--------------------------------------------------------
Normal based on 1987-97 data.

Table 2--Ordinary Least Squares Estimates for California
         Yield Equation, 1987-97.
--------------------------------------------------------
LN(Y)  =  7.13814  +  0.59198 LN(X)
                      (3.914)

R-squared  =  0.630
Standard error of the estimate  =  0.068596
Durbin-Watson statistic  =  1.683
Degrees of freedom  =  9
--------------------------------------------------------

Growing Demand for Cotton Products in Developed Countries
by Stephen MacDonald

While 1997's Asian currency devaluations reduced consumer demand directly in
Indonesia and South Korea, and indirectly in Japan, economic growth and
consumer demand has been largely unaffected in Europe and North America. Even
Japan's economic difficulties are far less severe than those in Southeast Asia,
and world cotton consumption can be expected to continue growing during
1998/99.

According to forecasts supplied to ERS, real consumer expenditures during 1998
in the United States, Western Europe, and Japan are expected to grow by 3.8,
2.6, and 0.1 percent, respectively. During 1999, the respective forecasts are
2.5, 2.5, and 1.9 percent. Thus, the developed countries as a group remain a
growing market for textile products despite the economic slowdown in the
developing world.

According to the International Cotton Advisory Committee (ICAC), consumers in
developed countries accounted for final consumption of about 44 percent of the
cotton fiber consumed in 1996/97. USDA data show that textile mills in
developed countries accounted for 21 percent of world cotton fiber consumption
in 1996/97, with the difference comprised of imports of cotton textile
products, largely from developing countries. Consumer demand in developed
countries therefore plays approximately equal roles in stimulating mill use in
developed and developing countries, and can even offset a slowdown in consumer
demand in developing countries.

A model for forecasting final consumption of cotton in developed countries (see
1997 Proceedings: Beltwide Cotton Conferences, pages 278-281 for details)
suggests consumers in developed countries may increase their purchases of
cotton fiber in the form of apparel and other products by 4.1 to 4.8 percent in
calendar 1998. The upper end of the forecast range is derived from a fixed
parameter version of the model estimated over 1974-95. The lower end of the
range is derived from the 1995 values of a version of the model with parameters
that vary through time. Consumer promotion and industrial research funded by
USDA's Cotton Check-off Program since 1967 are determined to have resulted in
structural shifts in demand for cotton since 1974. The income elasticity of
consumer demand for cotton changed between the 1970's and the 1990's,
particularly in North America. Allowing changing parameters is one way for a
simple demand forecasting model to indirectly account for the impact of
promotional expenditures.

By comparison, in October 1997, the ICAC estimated a 4.0-percent growth rate
for developed countries' cotton product purchases in calendar 1997. While
Japan's economic difficulties suggest an economy-wide slowdown in consumption
in 1998, the United States and Western Europe are forecast to have accelerating
consumer spending, and textile consumption in the developed countries should
surpass its 1996/97 average.

The model uses lagged fiber prices, so a forecast of cotton consumption in
calendar 1999 was made relying solely on expected changes in total consumer
expenditures, giving a 2.2 to 2.3 percent growth forecast. The average of the
1998 and 1999 forecasts is in the 3.2 to 3.5 percent range. This compares
favorably with the 2.2 percent average growth realized during 1990-97, and
underlies USDA's forecast growth in world cotton consumption in 1998/99.
                              *     *    *

The next Cotton and Wool Outlook (CWS-0398) will be released on July 13.

*   *   *   *   *   *   *   *  *   *   *   *   *   *   *   *   *   *   *   *  

ERS will publish only 5 issues of this report in 1998. Reports will be released
in March, May, July, August, and November. We will continue to publish the
Cotton and Wool Yearbook, which will be released in late November. During the
months when the Cotton and Wool Outlook are not published, selected tables from
the report will be updated and available on the Internet. Check the ERS web
site (http://www.econ.ag.gov) for these reports and for other publications
relating to cotton.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *  
Information Contacts:
Leslie Meyer  (U.S. Cotton)     lmeyer@econ.ag.gov    (202) 694-5307
Steve MacDonald (Foreign Cotton)     stephenm@econ.ag.gov  (202) 694-5305
Robert Skinner (Textiles and Wool)    rskinner@econ.ag.gov  (202) 694-5313

*   *   *   *   *   *   *   *  *   *   *   *   *   *   *   *   *   *   *   *  

U.S. COTTON SUPPLY AND USE ESTIMATES
----------------------------------------------------------------------
                                                   1997/98
                                         ----------------------------
Item                          1996/97     Mar        Apr         May
----------------------------------------------------------------------
Upland:                                      Million acres
  Planted                      14.38     13.57      13.57       13.56
  Harvested                    12.61     13.03      13.03       13.02
                                                Pounds
  Yield/harvested acre           701       679        673         673

                                        Million 480-lb. bales 
  Beginning stocks              2.54      3.92       3.92        3.92
  Production                   18.41     18.44      18.28       18.25
    Total supply 1/            21.36     22.38      22.21       22.17
  Mill use                     11.02     11.39      11.39       11.39
  Exports                       6.40      7.08       7.08        7.05
   Total use                   17.42     18.47      18.47       18.44
  Ending stocks                 3.92      3.94       3.78        3.75
                                               Percent
  Stocks-to-use ratio           22.5      21.3       20.4        20.3

Extra-long staple:                           1,000 acres
  Planted                        258       252        252         250
  Harvested                      256       251        251         249
                                                Pounds
  Yield/harvested acre           991     1,027      1,048       1,056

                                         1,000 480-lb. bales
  Beginning stocks                66        51         51          51
  Production                     529       537        548         548
    Total supply 1/              595       588        599         599
  Mill use                       106       110        110         110
  Exports                        466       425        425         450
    Total use                    572       535        535         560
  Ending stocks                   51        63         74          49
                                               Percent
  Stocks-to-use ratio            8.9      11.8       13.8         8.8
----------------------------------------------------------------------
Based on USDA estimates. 1/ Includes imports.

WORLD COTTON SUPPLY AND USE ESTIMATES
----------------------------------------------------------------------
                                                   1997/98
                                        ------------------------------
Item                          1996/97     Mar         Apr        May
----------------------------------------------------------------------
Supply:                                 Million 480-lb. bales
Beginning stocks
  World                        33.81     36.32      36.26       36.26
  Foreign                      31.20     32.35      32.29       32.29
Production
  World                        89.18     90.08      89.19       88.63
  Foreign                      70.24     71.11      70.36       69.83
Imports
  World                        28.75     26.82      26.94       27.02
  Foreign                      28.35     26.81      26.93       27.02
Use:
Mill use
  World                        88.63     88.62      88.20       88.55
  Foreign                      77.50     77.12      76.70       77.05
Exports
  World                        26.49     26.34      26.36       26.12
  Foreign                      19.63     18.84      18.86       18.62
Ending stocks
  World                        36.26     37.98      37.55       36.95
  Foreign                      32.29     33.98      33.70       33.15

Stocks-to-use ratio                            Percent
  World                         40.9      42.9       42.6        41.7
  Foreign                       41.7      41.9       43.9        43.0
---------------------------------------------------------------------
Based on USDA estimates.

FIBER SUPPLY
----------------------------------------------------------------------
                                         1998                    1997
                              -----------------------------
Item                             Jan      Feb         Mar        Mar
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Ginnings                       554         0          0           0
Imports since August 1           2.6       2.7         NA       401.1
  Stocks, beginning           14,919    13,802     12,128      11,950
    At mills                     588       624        685         683
    Public storage            12,356    11,365      9,824       9,397
    CCC stocks                 2,092     2,820      2,564       2,231

Manmade:                                   Million pounds
  Production                   901.5     837.6      902.7       850.8
    Noncellulosic              867.5     804.6      868.7       805.0
    Cellulosic                  34.0      33.0       34.0        45.8
    Total since January 1      901.5   1,739.1    2,641.8     2,555.8

                               1997            1998              1997
                                        ------------------
                                Dec       Jan        Feb          Feb
----------------------------------------------------------------------
                                            Million pounds
  Raw fiber imports            122.8     126.8      114.3       105.4
   Noncellulosic               114.7     117.0      105.4        97.9
    Cellulosic                   8.1       9.8        8.9         7.5
    Total since January 1    1,359.3     126.8      241.1       228.4

Wool and Mohair:                            1,000 pounds
  Raw wool imports, clean      8,584     8,790      5,390       5,767
    48's-and-finer             7,069     6,555      3,945       2,144
    Not-finer-than-46's        1,515     2,235      1,445       3,623
    Total since January 1     76,446     8,790     14,180      15,469

  Wool top imports               199       283         60          79
    Total since January 1      2,530       283        343         152
  Mohair imports, clean            0         2          0           9
    Total since January 1          1         2          2           9
----------------------------------------------------------------------
NA = Not available.

COTTON SYSTEM FIBER CONSUMPTION
----------------------------------------------------------------------
                                          1998                   1997
                              ----------------------------
Item                             Jan       Feb        Mar         Mar
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
All consumed by mills 1/         979       897        983         907
  Total since August 1 1/      5,756     6,652      7,635       7,337
  SA annual rate 2/           11,513    11,423     11,401      10,841
  SA daily rate 2/              44.1      43.8       43.7        41.5
  Daily rate                    44.5      44.8       44.7        43.2

Upland consumed by mills 1/      969       887        973         897
  Total since August 1 1/      5,701     6,588      7,560       7,267
  SA annual rate 2/           11,396    11,296     11,280      10,720
  SA daily rate 2/              43.7      43.3       43.2        41.1
  Daily rate                    44.0      44.3       44.2        42.7
                                          1,000 Spindles
Spindles in place              5,518     5,459      5,437       5,763
  Active spindles              5,209     5,152      5,108       5,437
    100 percent cotton         2,605     2,605      2,563       2,584
    100 percent manmade          823       788        778         934
    Blends                     1,781     1,759      1,767       1,919
                                             Percent
Cotton's share of fibers        78.4      78.5       78.3        78.6

Manmade:                                    1,000 pounds
Total consumed by mills 1/   129,451   117,999    130,375     118,401
  Total since August 1 1/    744,064   862,063    992,438     985,614
  Daily rate                   5,884     5,900      5,926       5,638
    Noncellulosic staple       5,371     5,356      5,456       4,988
    Cellulosic staple            513       544        470         650
----------------------------------------------------------------------
1/ Adjusted to calendar month. 2/ SA = seasonally adjusted.

FIBER EXPORTS
----------------------------------------------------------------------
                                1997            1998             1997
                                        -----------------
Item                             Dec       Jan        Feb         Feb
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Upland exports                 721       667        718         673
    Total since August 1       2,383     3,050      3,768       3,287
  Sales for next season          147        63         93          99
    Total since August 1         236       300        392         295
ELS exports                     53.2      67.0       59.4        55.8
    Total since August 1       129.5     196.6      255.8       283.3
  Sales for next season          2.4      16.1       11.9         4.7
    Total since August 1        11.1      27.2       39.2        23.1

Manmade:                                   Million pounds
  Raw fiber exports             80.9      85.0       82.6        93.0
    Noncellulosic               75.6      82.4       79.1        85.1
    Cellulosic                   5.3       2.6        3.5         7.9
    Total since January 1    1,052.8      85.0      167.6       196.9

Wool and Mohair:                           1,000 pounds
  Raw wool exports, clean      167.9     381.8       30.8       139.9
   Total since January 1     4,731.9     381.8      412.6       440.0
  Wool top exports             808.0     867.4      271.4       522.3
    Total since January 1    8,241.8     867.4    1,138.8       967.4
  Mohair exports, clean        393.5      45.3       30.1       222.8
    Total since January 1    1,888.7      45.3       75.4       222.8
----------------------------------------------------------------------

FIBER PRICES
----------------------------------------------------------------------
                                          1998                   1997
                             -----------------------------
Item                            Feb        Mar       Apr          Apr
----------------------------------------------------------------------
Domestic cotton prices:                    Cents per pound
  Adjusted world price         54.69     54.31      51.29       64.68
  May'98 futures               67.23     69.11      63.33       77.37
  Dec'98 futures               72.13     73.74      68.99       74.54
Upland spot 41-34              63.66     67.04      61.88       69.09
  Pima spot 03-46              99.47    101.64     102.57      116.50
  Avg. price received by:
    Upland producers           62.00     63.40      62.40       67.60

  Mill delivered:
    Cotton
      Actual                   69.48     72.95      69.50       75.18
      Raw fiber equivalent     77.20     81.06      77.22       83.53
    Rayon staple
      Actual                  115.00    115.00     115.00      115.00
      Raw fiber equivalent    119.79    119.79     119.79      119.79
    Polyester staple
      Actual                   71.00     71.00      71.00       68.00
      Raw fiber equivalent     73.96     73.96      73.96       70.83

    Price ratios                               Percent
      Cotton/rayon              64.4      67.7       64.5        69.7
      Cotton/polyester         104.4     109.6      104.4       117.9

Northern Europe cotton quotes:            Cents per pound
  A Index                      68.68     68.41      65.08       78.85
  Memphis Territory            74.50     75.38      71.75       80.50
  California/Arizona           76.25     77.13      72.33       82.13
  B Index                      66.96     66.98      63.85       73.19
  Orleans/Texas                69.25     70.19      66.45       76.25

Wool prices (clean):                      Dollars per pound
 U.S. 56's                      1.25      1.18       1.12        1.34
  Australian 56's 1/            1.71      1.70       1.71        1.95
 U.S. 60's                      1.54      1.50       1.50        1.80
  Australian 60's 1/            1.87      2.02       1.80        2.02
 U.S. 64's                      1.95      1.95       1.88        2.28
  Australian 64's 1/            2.25      2.47       2.05        2.61
---------------------------------------------------------------------
NQ = No quotes.
1/ In bond, Charleston, SC.

U.S. TEXTILE TRADE
----------------------------------------------------------------------
                                1997            1998             1997
                                         ------------------
Item                             Dec        Jan        Feb        Feb
----------------------------------------------------------------------
Imports:                                   1,000 pounds 1/

  Yarn, thread, and fabric   202,649   207,097    197,240     207,523
    Cotton                    86,988    85,042     84,309      72,335
    Linen                     25,089    27,226     23,748      46,138
    Wool                       4,157     4,494      3,990       3,584
    Silk                         911       727        695         692
    Manmade                   85,504    89,608     84,500      84,773

  Apparel                    482,140   506,145    505,530     413,651
    Cotton                   288,843   297,480    309,664     246,315
    Linen                     12,816    16,475     13,840      10,535
    Wool                      12,308    12,616     12,368      11,348
    Silk                      11,680    15,272     12,220      11,677
    Manmade                  156,493   164,303    157,439     133,777

  Home furnishings            43,978    47,980     45,180      31,746
    Cotton                    32,932    36,248     34,858      23,453
    Linen                        291       123        107          95
    Wool                         172        85        117          66
    Silk                          54        35         42          12
    Manmade                   10,530    11,489     10,055       8,120

  Floor coverings             25,461    25,565     24,350      23,108
    Cotton                     3,927     3,919      3,871       4,277
    Linen                      3,239     3,215      3,042       2,644
    Wool                       7,825     8,790      7,212       5,730
    Silk                         389       335        499         434
    Manmade                   10,082     9,306      9,725      10,023

  Total imports 2/           760,892   794,594    778,671     682,203
    Cotton                   416,075   426,899    436,278     349,750
    Linen                     41,458    47,057     40,785      59,440
    Wool                      24,587    26,057     23,741      20,771
    Silk                      13,034    16,369     13,456      12,814
    Manmade                  265,739   278,212    264,411     239,428

Exports:                                 1,000 pounds 1/

  Yarn, thread, and fabric   146,680   155,831    172,298     119,966
    Cotton                    48,916    51,616     57,627      35,447
    Linen                      4,227     3,827      4,516       3,520
    Wool                       3,783     4,295      4,612       3,557
    Silk                       1,552     1,345      1,779       1,649
    Manmade                   88,202    94,747    103,764      75,792

  Apparel                    122,612   142,489    153,969     135,412
    Cotton                    72,146    81,153     88,452      83,319
    Linen                      1,363     1,352      1,543       2,060
    Wool                       5,947     8,052      8,986       5,954
    Silk                       3,444     3,706      4,029       2,125
    Manmade                   39,712    48,226     50,959      41,954

  Home furnishings             6,477     5,409      7,298       5,315
    Cotton                     3,783     3,125      4,417       3,130
    Linen                        308       324        455         293
    Wool                         146        81        126          74
    Silk                         150       156        190         210
    Manmade                    2,090     1,723      2,110       1,607

  Floor coverings             36,882    35,059     35,179      30,014
    Cotton                     3,522     3,498      3,352       3,154
    Linen                      2,029     2,162      1,941       1,419
    Wool                       3,199     2,619      2,968       1,467
    Silk                         148       156        131         ---
    Manmade                   27,983    26,624     26,786      23,975

  Total exports 2/           312,892   339,090    369,059     252,615
    Cotton                   128,433   139,481    153,919     110,214
    Linen                      7,934     7,675      8,463       6,793
    Wool                      13,088    15,062     16,705       9,296
    Silk                       5,294     5,363      6,130       3,222
    Manmade                  158,142   171,510    183,843     123,090
---------------------------------------------------------------------
--- = An absence of trade. 1/ Raw fiber equivalent. 
2/ Includes headgear.

U.S. COTTON TEXTILE IMPORTS
----------------------------------------------------------------------
                               1997            1998             1997
                                        -----------------
Country                         Dec       Jan        Feb         Feb
----------------------------------------------------------------------
                                    1,000 pounds 1/

North America                171,049   132,522    171,327     127,646
  Canada                      11,985    11,952     15,090       9,789
  Costa Rica                   8,555     5,819      7,461       7,651
  Dominican Republic          20,560     7,989     17,249      13,823
  El Salvador                 12,725    10,154     12,865      10,032
  Guatemala                    7,486     5,728      7,920       7,223
  Haiti                        2,419     1,677      2,368       1,110
  Honduras                    26,383    17,616     23,233      17,844
  Jamaica                      7,361     4,174      6,580       6,157
  Mexico                      70,993    64,204     75,474      51,214
  Nicaragua                    2,200     2,828      2,650       2,437

South America                  8,863     7,747      6,037       6,881
  Argentina                      123        19         25          13
  Brazil                       3,947     3,559      1,959       2,358
  Chile                           97         4         53         192
  Colombia                     2,227     1,715      2,083       2,352
  Peru                         1,996     2,139      1,563       1,639
  
Europe                        21,382    26,844     24,684      19,258
  Estonia                        818       921        686         625
  France                         704       562        578         605
  Germany                        673       531        615         391
  Italy                        3,218     2,900      2,733       3,139
  Portugal                     2,281     1,539      1,780         765
  Russia                         675       734      1,115         856
  Spain                        1,151       782        815       1,154
  Turkey                       7,643    14,883     12,009       8,179
  United Kingdom                 911       720        956         862
  
Asia                         195,148   237,305    216,865     185,076
  Bahrain                        810     1,181        927         778
  Bangladesh                  12,250    17,455     17,810      14,364
  China                       21,876    27,015     30,062      28,548
  Hong Kong                   26,178    33,760     21,714      18,747
  India                       23,633    24,931     29,534      29,679
  Indonesia                   12,141    15,982     15,781      12,021
  Israel                       1,999     3,036      2,014       1,851
  Japan                          856       864        788       1,190
  Macao                        4,563     5,700      3,834       3,877
  Malaysia                     4,546     6,011      3,972       3,355
  Nepal                        1,209     1,476      1,488       1,440
  Oman                         1,564     2,420      1,521       1,468
  Pakistan                    30,950    32,758     34,933      24,606
  Philippines                  8,529    11,141      8,367       7,380
  Qatar                        1,209     1,697      1,300       1,220
  Singapore                    2,276     2,052      2,296       1,630
  South Korea                  5,589     6,918      5,160       4,190
  Sri Lanka                    6,433     8,243      7,198       6,543
  Taiwan                       9,652    11,781      8,488      10,493
  Thailand                    11,203    13,772     10,436       7,133
  U Arab Em                    2,018     2,352      2,188       2,297

Oceania                        1,794     1,858      1,484         701
  Australia                    1,063       772        790         267
  Fiji                           499       774        526         303
 
Africa                        13,085    14,886     11,540       8,852
  Egypt                        6,461     7,546      6,019       4,452
  Lesotho                      1,826     2,193      1,263       1,044
  Mauritius                    1,510     1,708      1,548       1,265
  Morocco                      1,011     1,104        973         456
  South Africa                   671       788        362         607
  Tunisia                         44        30         73         170

World  2/                    416,075   426,899    436,278     349,750
----------------------------------------------------------------------
1/ Raw fiber equivalent. Totals may not add due to rounding.

U.S. COTTON TEXTILE EXPORTS
----------------------------------------------------------------------
                               1997             1998            1997
                                        ------------------
Country                         Dec        Jan         Feb       Feb
----------------------------------------------------------------------
                                   1,000 pounds 1/

North America                100,293   112,449    123,135     100,942
  Canada                      20,388    24,526     26,943      18,610
  Costa Rica                   7,323     7,056      6,961       8,385
  Dominican Republic           9,882     9,474     14,515      13,478
  El Salvador                  3,532     5,285      6,353       3,198
  Guatemala                    2,997     2,369      3,333       4,172
  Haiti                        2,178       944      1,432       1,399
  Honduras                    12,292    15,202     16,300      13,465
  Jamaica                      4,111     4,065      4,730       5,543
  Mexico                      36,283    42,245     41,118      31,405

South America                  4,194     5,056      6,577       4,252
  Argentina                      284       214        232         112
  Brazil                         361       317        683       1,028
  Chile                          626       562      2,538         367
  Colombia                     1,147     1,457      1,464       1,254
  Peru                           153        83         70         157
  Venezuela                      939     2,007      1,282         920

Europe                        10,928    11,479     12,663       7,727
  Belgium                      3,319     3,964      3,477         824
  France                         645       343        319         696
  Germany                      1,382     1,203      1,174       1,185
  Ireland                        628       106        946         138
  Italy                          343       375        472         208
  Netherlands                    706       618        803         581
  United Kingdom               2,486     3,411      3,862       2,270

Asia                          10,818     8,808      9,368      10,877
  China                          542       375        160          57
  Hong Kong                    1,212       976      2,024         838
  Israel                       1,647     1,588      1,113       1,005
  Japan                        3,537     2,973      3,817       5,990
  Philippines                    582       303        280         306
  Saudi Arabia                   772       476        260         421
  Singapore                      565       279        193         338
  South Korea                    294       235        149         450
  Taiwan                         308       239        295         289
  U Arab Em                      479       514        344         250

Oceania                        1,040       876        926         754
  Australia                      783       669        667         519
  New Zealand                    110       129         96         150

Africa                           957       641        981         385
  Egypt                           31        27         75           4
  Ghana                           19        27         20          22
  Ivory Coast                     22        41         30          82
  Nigeria                        193        72        298          41
  South Africa                   146       115        175         133

World  2/                    128,433   139,481    153,919     125,093
----------------------------------------------------------------------
1/ Raw fiber equivalent. Totals may not add due to rounding.
FINAL 1997 U.S. COTTON AREA, YIELD, AND PRODUCTION
-------------------------------------------------------------------
State/
Region         Planted     Harvested        Yield      Production
-------------------------------------------------------------------
                                           Lbs./          1,000
                   1,000 acres         harvested acre     bales

Upland:
  Alabama         535          442           597            550
  Florida         100           99           577            119
  Georgia       1,440        1,425           646          1,919
  N. Carolina     670          665           671            930
  S. Carolina     290          285           691            410
  Virginia        101          100           659            137
    Southeast   3,136        3,016           647          4,065

  Arkansas        950          940           859          1,683
  Louisiana       630          625           757            986
  Mississippi     985          970           901          1,821
  Missouri        380          375           723            565
  Tennessee       490          480           662            662
    Delta       3,435        3,390           809          5,717

  Kansas           12           10           418              9
  Oklahoma        200          190           462            183
  Texas         5,500        5,150           479          5,140
    Southwest   5,712        5,350           478          5,332

  Arizona         325          324         1,255            847
  California      880          875         1,202          2,191
  New Mexico       70           66           676             93
    West        1,275        1,265         1,188          3,131

Total Upland   13,558       13,021           673         18,245

Pima:
  Arizona          22           22           912             42
  California      185          184         1,141            437
  New Mexico       11           11           641             15
  Texas            32           32           815             54

Total Pima        250          249         1,056            548

Total All      13,808       13,270           680         18,793
-------------------------------------------------------------------
Based on the August Crop Production report.


END_OF_FILE