The Washington times., 1931-05-11
COTTON FUTURE
SCANNED BY
HANEY
Economist Analyses Market
and Finds Increased Usage
Main Hope Of Improvement
BY LEWIS HANEY

~ AAE
Director, New York University's Blu
Peau Of Business Research and
Former Economist of Federal
Trade Commission
Prior to Easter there was con-
siderable improvement in the cot
ton textile industry.
Not only did cloth manu-
facturers increase production, but
the demand was good enough to
reduce their stocks of goods, and
prices advanced. Raw cotton got
as high at II 1-3 cents in the
New York market.
During the past month, how
ever, cotton cloth prices have
been falling steadily. and the
markets for goods and yarns are
now weak.
Causes of Relapse
For this relapse there are two
reasons: The cloth manufac-
turers pushed production up a
little too fast; the statistical posi-
tion of raw cotton became
weaker, bringing lower prices and
thus hurting the demand for tex
tiles. buyers always tend to
figure that declining raw ma
terials will be followed by weaker
goods markets. Raw cotton is
now about 98 cents.
Only partly bullish was the
rapid increase in cotton manufac-
turing. A part of the increase has
proven undesirable because it pre-
vented the manufacturers from
getting enough for their product
to allow any profit. Their un-
filled orders were reduced.
Make Concessions
Now we find yarn sales slow
and hesitant. The demand for fin
ished goods has fallen off and
manufacturers are again making
concessions to get new contracts
as old orders run out.
The great English cotton manu-
featuring centers also report re-
lapse. Evidently the buying OF
cotton goods in India and China
has made little if any improve
ment in spite of alleged political
settlement in India and tlrmer
silver prices.
AS to cotton, we have to admit
that if anything the statistics are
more discouraging than a month
ago. Despite the first quarter
gain in domestic mill consump-
ton, the figure is very low, and
the total for the season will prob
ably be only about 81 million
bales. Exports continue backward
and do not seem likely to be as
much as rs million bales.
Big CarryOver
So the total domestic consump-
ton and exports probably will not
exceed 12,500,O00 bales. Since
the total supply has been we'll
over 10000 900 bales. we will have
a carry-over that will be nearer
100000 bales than 100000.
The world visible supplies, both
of all cotton and of American cot
ton, are enormous. Nor are they
decreasing as usual at this season.
The quantity in public storage in
this country is the largest in com
parison with current mill con-
sumption since 1921.
I still think that cotton prices
are abnormally low. But with
such a large supply and such a
depressed demand, there seems
to be little hope of a sustained
advance.
Crop Reduction
The bulls on cotton will have to
rely upon acreage reduction and
unfavorable weather. There has
been a good deal of cold, rainy
weather, which delays the germi-
nation of the seed. Southern
farmers have used much less fer
tilizer than usual. These things
may reduce the next crop to
something like 100000 bales.
But even so, we will have about
as much cotton next year as this
l year. Sustained improvement,
{ therefore, will probably depend
on the demand.
Z N