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Department of
Agriculture
Foreign
Cotton:
Agricultural
Service World Markets and Trade
Circular Series
FOP 07 - 10
July 2010
7 16%
10%
4
8%
3
6%
2
4%
1
2%
0%
Since 2008, world cotton prices have been rising due to lower supplies. In addition, more favorable
exchange rates have increased Franc-Zone Africa (FZA) cotton prices in local terms relative to world
prices. As a result, production and exportable supplies in the region have stabilized. However, the FZA
share of world trade has settled at about half of what is was in 2003/04.
The prevailing situation was radically different before 2008. Nearly all international cotton trade is
conducted in U.S. dollars. With the African franc pegged to the euro, the near doubling of the value of the
euro prior to 2008 lowered FZA prices in local terms relative to the already low world prices. The
decline in local prices disrupted efforts to privatize the cotton sector, resulting in falling area and yields.
As a result, production fell and exports dwindled, even as world trade was growing.
Any recovery will likely depend on favorable exchange rates and improved efficiency.
Major Exporters:
! United States is raised 800,000 bales to 14.3 million as crop conditions remain favorable.
! India is raised 100,000 bales to 5.9 million as export restrictions are lifted.
Major Importers:
! Turkey is raised 300,000 bales to 3.3 million as stronger domestic demand is expected to carry
through from the current season.
! China is raised 150,000 bales to 11.6 million based on delayed 2009/10 shipments from India.
Major Exporters:
! Brazil is raised 100,000 bales to 2.0 million on end-of-season demand accelerating shipments.
Major Importers:
! China is lowered 150,000 bales to 10.7 million as India’s export restrictions delay shipments into
2010/11.