THE

WORLD
COTTON
MARKET:

PROSPECTS
FOR
THE
NINETIES

OCTOBER 1993
 bE\i?R&t.J J--bSoJ

THE WORLD COTTON MARKET:

PROSPECTS FOR THE NINETIES

A joint study by
the Commodities and Trade Division
of the Food and Agriculture Organization (FAO)
of the United Nations
and
the Secretariat
of the International Cotton Advisory Committee

ICAC FAO
Washington, D.C. Rome
© International Cotton Advisory Committee and the Food and Agriculture Organization, 1993

International Cotton Advisory Committee Commodities and Trade Division

1629 K Street, Suite 702 FAO
Washington, D.C., 20006 Via delle Terme di Caracalla
USA 00100 Rome
Italy

Library of Congress Cataloging-in-Publication Data

International Cotton Advisory Committee and

Food and Agriculture Organization of the United Nations

The World Cotton Market: Prospects for the Nineties

ISBN 0-9638361-0-2
Library of Congress Catalog Card Number 93-061078
 iii

Executive Summary

Production and consumption of cotton have expanded strongly over recent decades, and the geographical
patterns of production and consumption have changed dramatically. Cotton is now grown in over 80
countries of the world, and developing countries, particularly in Asia, are becoming increasingly dominant
in processing of cotton and other textiles.

World trade in raw cotton has tended to expand at a slower rate than consumption, as some producing
countries, particularly in developing regions, have increased their processing capacity. Developed countries
have, in recent years, become net exporters of raw cotton to developing countries, largely because of
increased imports by some cotton processing developing countries. As a corollary, however, trade in
textiles and clothing from developing to developed countries has expanded markedly.

The projections presented here are based on an econometric model containing elements describing
production, mill consumption, and end-use consumption of cotton as well as other textile fibers. Some
forty countries, accounting for 90% of world production and 75% of consumption, are included in the
model.

Production and consumption of cotton are projected to reach 23 million tons by the year 2000, from 21
and 19 million tons respectively in 1991. The increased production is expected to be based, as in the past,
on increased yields rather than on an expanded area of cultivation. Both mill consumption and end-use
are forecast to grow at faster rates in developing than in developed countries. Strong economic growth in
China (Mainland), in particular, is expected to contribute to increased consumption. Cotton's share of the
end-use market is projected to remain at 48.4% in 2000.
 V

TABLE OF CONTENTS
Page

Executive Summary iii

Contents v

Introduction 1

Chapter I. Structure of the Cotton Market 3

Elements of Supply 3
Elements of Demand 5
Demand for Final Goods 5
Demand for Raw Cotton 6
International Trade 7
Trade in Raw Cotton 7
Trade in Textile Manufactures 9
The Role of Cotton in the Economies of Developing Countries 9

Chapter II. Cotton Market: Developments During the 1980s 13

Production 14
Mill Consumption 16
Trade in Raw Cotton 17
End-use Consumption 20
Trade in Cotton Manufactures 21
Prices 22

Chapter III. Modelling the World Cotton Market 25

Core Model: Production and End-use Demand of Cotton 25

Production 25
End-use Demand for Cotton 26
Market Clearance and International-to-domestic Price Linkage 26
Additional Components 27
Mill Consumption 27
End-use Consumption of All Textile and Non-cotton Textile Fibers 28

Appendix Elasticities and Exogenous Variables Used In the Forecasting Model 29

Chapter IV. Prospects for the 1990s 37

Developed Countries 39
European Community 40
Japan 40
United States of America 40
vi

Former USSR 41
Developing Countries 42
China (Mainland) 42
Pakistan 43
India 44
Other Developing 44
World Cotton Trade 45

List of Tables
1. Value of Cotton Production and Exports, Selected Countries 11
2. Elasticities Used in Projecting Area 30
3. Elasticities Used in Projecting Yield 30
4. Elasticities Used in Projecting Mill Consumption 31
5. Elasticities Used in Projecting End-use Cotton 32
6. Elasticities Used in Projecting End-use Non-cotton 33
7. Elasticities Used in Projecting End-use Textile Fibers 34
8. Projections of GDP Per Capita and Population Growth 35
9. Actual and Projected Production of Raw Cotton 47
10. Actual and Projected Mill Consumption of Cotton 48
11. Actual and Projected Final Consumption of Cotton 49
12. Actual and Projected Share of Cotton 50
13. Actual and Projected Final Consumption of All Fibers 51
14. Actual and Projected Final Consumption Per Capita of Cotton 52
15. Actual and Projected Final Consumption Per Capita of all Fibres 53
16. Actual and Projected Exports of Raw Cotton 54
17. Actual and Projected Imports of Cotton 55
18. Actual and Projected Net Imports of Cotton Manufactures 56

List of Figures

1. World Cotton Production and Consumption 3

2. World Area, Yield and Production 4
3. World Cotton Production 1960 4
4. World Cotton Production 1990 4
5. World Consumption of Cotton and All Textile Fibers 5
6. World Cotton Mill Consumption 1960 6
7. World Cotton Mill Consumption 1990 6
8. World Cotton Production and Trade 7
9. World Cotton Imports 1960 8
10. World Cotton Imports 1990 8
11. World Cotton Exports 1960 8
12. World Cotton Exports 1990 8
13. World Cotton Fabric Exports 1960 9
14. World Cotton Fabric Exports 1989 9
15. World Market Share of Cotton 13
16. Cotton Production: Developed and Developing Countries 14
17. Cotton Production: Five Largest Producers 14
18. World Cotton Production 15
19. World Cotton Area 15
 vi'

20. World Cotton Yields 16

21. Cotton Mill Consumption: Developed and Developing Countries 16
22. Cotton Mill Consumption: Five Largest Consumers 17
23. World Raw Cotton Trade 17
24. Share of World Imports: Far East Asia 18
25. Share of World Imports: Western Europe 18
26. Net Exports of Raw Cotton: China (Mainland) 19
27. Net Exports of Raw Cotton: Turkey 19
28. Net Exports of Raw Cotton: Brazil 19
29. Net Exports of Raw Cotton: Mexico 20
30. End-use Cotton Consumption: Developed Countries 20
31. End-use Cotton Consumption: Developing Countries 20
32. End-use Cotton Consumption per Capita: World 21
33, End-use Cotton Consumption per Capita: Developed Countries 21
34. End-use Cotton Consumption per Capita: Developing Countries 21
35. Net Imports of Cotton Manufactures 22
36. Cotlook A Index 22
37. Cotlook A Index and Inverted World Stocks to Use Ratio 22
38. End-use Textile Fiber Consumption: World 37
39. End-use Textile Fiber Consumption per Capita: World 37
40. Cotton Mill Consumption: World 38
41. End-use Cotton Consumption: Developed and Developing Countries 38
42. End-use Cotton Consumption per Capita: World 38
43. Cotton Production: World 39
44. Cotton Mill Consumption: Developed Countries 39
45. Cotton Production: Developed Countries 39
46. Cotton Mill Consumption: European Economic Community 40
47. Cotton Mill Consumption: Japan 40
48. Cotton Production: United States 41
49. Cotton Mill Consumption: United States 41
50. Cotton Production: Central Asia 41
51. Cotton Mill Consumption: Former USSR 42
52. Cotton Mill Consumption: Developing Countries 42
53. Cotton Production: Developing Countries 42
54. Cotton Mill Consumption: China (Mainland) 43
55. Cotton Production: China (Mainland) 43
56. Cotton Mill Consumption: Pakistan 43
57. Cotton Production: Pakistan 44
58. Cotton Production: India 44
59. Cotton Mill Consumption: India 44
60. Cotton Mill Consumption: Indonesia and Thailand 45
61. Imports of Raw Cotton: Developed and Developing Countries 45
62. Exports of Raw Cotton: Developed and Developing Countries 45
63. Net Imports of Cotton Manufactures: Developed and Developing Countries 46
 Introduction
The world cotton industry has expanded and changed dramatically over the past half century. In addition
to its importance for developed countries, for an increasing number of developing countries, cotton
production and processing play a crucial role in their economies and in their economic development.
Production of cotton and the subsequent export of lint and cotton textiles provide a source of export
income for an increased number of developing countries, and for some countries which produce no cotton,
the importation and processing of raw fiber for domestic consumption and subsequent re-export as
manufactured items plays a vital economic role.

Planners in government and those formulating strategies for industry and investors have a vital need for
information regarding the likely future direction of the world cotton industry. It is to provide such a guide
to the likely shape of the industry for the remainder of the decade that these projections have been
produced jointly by the secretariats of ICAC and FAO. This study is the first to be undertaken by the two
organizations and drew on the diverse expertise available within the two secretariats. Carlos Valderrama
had primary responsibility for the work at ICAC. Brian Moir and Josef Schmidhuber had responsibility
for the contribution of FAO to the project.

The world was divided into nine regions, specifying the production of cotton, the end-use of cotton and
of other apparel fibers, as well as mill consumption of cotton, for some 40 countries, which among them
account for three quarters of world production and consumption. The model is thus considered to provide
a sound representation of world cotton production and consumption. Projections of trade in cotton lint and
manufactures are calculated from production, mill consumption and end-use results.

The world cotton market is far too complex to be represented in complete detail in any model. Thus,
various simplifying assumptions that capture the crucial elements of the market have been employed to
permit a manageable, but still representative, model. The level of production and consumption of cotton
depend crucially on economic variables such as world population and income, and prices of cotton, other
textile fibers, and other agricultural commodities. Projections of such variables were taken from various
sources for incorporation into the projections model.

This modelling exercise captures the trends and relationships evident in historical data, modified where
necessary by expert expectations of future forces. It is hoped that these projections represent a useful
guide, as no economic forecast can accurately predict the future, to the forces which are seen as likely to
shape the future of the industry during the remainder of the decade.
 I
Structure of the Cotton Market

Elements of Supply

The world cotton industry has changed dramatically over recent decades with production of cotton
having expanded markedly in response to strong consumer demand for cotton products. World production
during the 1960/61 season was slightly in excess of 10 million tons. Thirty years later, production reached
19 million tons, an average annual increase of 2.1%. Two features of this expansion are notable; first, it
is due almost entirely to higher yields, with virtually no increase in the area planted; and second, it took
place in a wide number of countries and was concentrated in developing regions. During the last 30 years,
the production of cotton has spread to many more countries around the world.

Virtually every cotton producing country in the world increased its yields over the past 30 years, in some
cases, very significantly. Increased areas of land under irrigation, coupled with improved plant varieties,
increased fertilizer application and improved pest control techniques resulted in world wide average yields
increasing from 310 kg/ha in 1960/61 to 595 kg/ha in 1991/92. China's yields expanded more than three-
fold, while those of India and Pakistan doubled. The USA, the former USSR and Egypt, which had
relatively high levels of technology 30 years ago, nevertheless managed to improve their yields by between
20% and 40%.

In contrast, the area planted globally to cotton expanded only slightly over the past 30 years. However,
many countries have increased their plantings while, at the same time, areas in some traditional cotton
growing countries declined. Countries in West Africa and in South America increased their plantings or,
in some cases, began to grow cotton for the first time. Pakistan and the former USSR also increased their
plantings. To a large extent, the expansion in cotton area has been a response to the strengthening demand
for cotton and to the attractiveness of returns from cotton production relative to other crops, despite a
downward trend in real prices for cotton.
In many developing countries, Figure 1
governments have actively encouraged
cotton production, either to provide raw
material for an expanding textile
industry, or to provide a foreign
exchange earner. In other countries,
cotton production is influenced by
government programs aimed at stabilizing
or increasing the incomes of growers.

As a result of these developments, cotton

production has now expanded throughout
a much larger number of countries than
was once the case. The United States,
which in 1960 supplied 30% of the
world's cotton, now supplies only 18%,
while a greater share is produced in
China and other Asian countries. West African countries and Australia, while remaining smaller producers,
have nevertheless increased their production markedly.
ru

The decision to produce cotton depends Figure 2

on the availability of certain endowments
without which cotton production is not WORLD AREA, YIELD AND PRODUCTION
possible. Some of these endowments,
such as production techniques, pest
controls, fertilizers and equipment can be Area Yield Production
Mellon he Tons/he Million loon
obtained, but others such as weather 50 1 25
conditions and, to an extent, soil
composition, are natural endowments that
cannot be reproduced with current I 0.6 15
technology at a reasonable cost.

r
20

In theory, the structure of cotton ko

::
production depends upon four basic
factors: labor, capital, land and 1960 1990
0
1960 1990
' 1960 1990
technology. A fifth factor, prices,
determines how much cotton is produced
given a structure of production.

Cotton production can be capital or labor intensive. This characteristic allows cotton to be produced in
a wide array of countries. Different combinations of labor and capital can be used in order to minimize
costs. In developing countries where labor costs are relatively low, it is reasonable to expect cotton
production to be labor intensive. In contrast, in developed countries, where labor is relatively expensive,
cotton production typically uses advanced equipment which can cut labor requirements. Labor and capital
can be easily substituted in several activities of cotton production, particularly in harvesting, planting and
soil preparation.

The use of land is limited by the availability of land suitable for cotton production. There are vast regions
in cotton producing countries where cotton production would be either relatively expensive or simply not
feasible. More important, cotton must compete for suitable land with other crops such as soybeans,
sorghum and many other food crops. Land that is more suitable for cotton production will allow higher
yields, which in turn will raise profits per hectare. Similarly, depending upon the management skills of
a community, the size of the cultivated area in a single cotton production operation can create economies
of scale, that is, can cut fixed costs per hectare.

Figure 3 Figure 4
Over the last 40 years, new technologies have been developed that contributed to greater returns from
cotton production, increasing yields and improving the physical characteristics of raw cotton required by
the textile industry. The use of new technologies, although prevalent in developed countries, took place
in developing countries as well.

With a determined structure of production, the level of world cotton production depends mainly on
expected prices and weather. As with other agricultural products, cotton farmers generally look at current
prices to base their expectations about prices at the end of the production cycle when the crop must be
sold.

Cotton production has shown considerable variability from year to year. While this variability is, in part,
the result of changes in weather patterns, causing variations in yields and harvested area, the major factor
behind year-to-year variations has been a cyclical pattern of responses between production, stocks and
prices. Cotton producers respond to periods of high prices by expanding their production which leads to
a buildup in stocks. Such an increase in production and stocks leads to a weakening of prices, and to a
subsequent contraction of production coupled with some increase in consumption. Thus, stocks are run
down, prices rise, and the cycle continues. Such a process has been clearly evident in recent years. In
1990/91 and 1991/92 production had increased to record levels under the influence of rather favorable
prices, the Cotlook A Index having averaged more than 80 US c/lb in 1989/90 and in 1990/91. Largely
as a result of the high level of production and the consequent accumulation of stocks, the Cotlook A Index
fell to an average of just 63 c/lb in 1991/92. In response to reduced prices, the world production of cotton
in 1992/93 is estimated 14% below the level of the previous season.

Elements of Demand

Demand for Final Goods

World textile consumption is mainly Figure 5

determined by population, consumer
spending and prices. Over the last three WORLD CONSUMPTION OF COTTON
decades the rate of growth of textile AND ALL TEXTILE FIBERS
Million tons Percent
consumption has decelerated from an
40 100
average 3.7% a year during the 1960s to
2.7% during the 1980s. World economic 30
growth, which determines consumer
spending, decelerated from an average 20
4.5% a year during the 1960s to 3%
during the 1980s. Similarly, average 10
20
annual population growth during the
1960s was 1.9%, compared to 1.7% 1960 1965 1970 1975 1980 1985 1990
during the 1980s. Of parallel importance
is the change in the structure of the _
Market share of cotton All textile fibers Cotton

world population. While in 1960 the

median age of the world population was
i.z years, in i'u tne meutan age
increased to 24.3 years. This aging of the world population resulted in the younger age groups declining
as a percentage of the total population. Indeed, the 0-14 age group decreased from 37.2% of the world
population in 1960 to 32.4% in 1990. Younger age groups have higher levels of textile consumption per
capita; at younger ages consumers outgrow and wear out clothing items more often.
Figure 6 Figure 7

For much of the 1960s and 1970s, consumption of cotton grew more slowly than that of other fibers, in
particular polyester, a new and popular fiber at the time. Subsequently, however, cotton recovered ground
in the 1980s.

In the early 1960s, world consumption of all textile fibers was around 15 million tons, or 5 kg per capita.
Cotton dominated the apparel market with a share of 65%. Non-cellulosic fibers, then relatively new to
the market, held only around 5% of the fiber market in the early 1960s. With the increasing popularity
of these new fibers, their share increased to 20% by 1970, while cotton's declined to 56%. By the end of
the 1970s, cotton's share of the market had fallen further to 46% in a market of 31 million tons or 7 kg
per capita. Over the ten years from 1979 to 1989 consumption of all textile fibers expanded further to 38
million tons, or to 7.3 kg per capita. In a reversal of the trend of the previous two decades, cotton's share
of the textile market increased from 46% to 48% over this time, with each one percentage point of market
share equivalent to some 320,000 tons. Thus, end use consumption of cotton reached over 18 million tons,
or 3.5 kg per capita, in 1989. This recovery in market share reflected promotion activities, the growing
environmental appeal of natural fibers, changes in fashion toward heavier apparel items and casual
clothing, and the development of spinning, weaving and knitting technology in the 1980s permitting
increased use of cotton.

Cotton's share of the textile market depends in part on relative prices and is, therefore, inclined to increase
when cotton prices are low relative to prices of other textile fibers. However, the impact is always indirect.
Fiber prices are the most important variable cost in spinning and, therefore, can determine annual profits
of a spinning operation. Although the cost of fiber is but a small part of the cost of a finished garment,
both fiber prices and prices of finished garments move in tandem. Cotton's share of the textile market is
also affected by the appeal of cotton vis-a-vis other fibers to the consumer, and in this respect there
appears to have been a change beginning in the late 1970s. Since then, partly as a result of promotion,
partly due to an increasing awareness of environmental issues which has made natural fibers more
attractive to consumers, cotton is now viewed by consumers as a more desirable fiber.

Demand for Raw Cotton

Mill consumption of raw cotton, an intermediate stage of cotton consumption, expands to meet the
growing final demand for cotton products. In contrast to the production of cotton, the processing of cotton
is a manufacturing operation. Although a textile mill can be involved in one or several of the
 7

transformations of cotton from spinning the fiber into yam to weaving the yarn into finished fabric, it is
the opening of a bale of cotton in a spinning mill that is universally recognized as mill consumption of
cotton. The structure of textile production can be either labor or capital intensive and the simplest low
technologies or the highest and most modem can be used. The choice of a technology generally depends
on the relative cost of labor and capital, but also on the required quality of the final product. As cotton
is used primarily in the production of apparel and household items and relatively less in industrial
products, the production of medium and low quality products can take advantage of low labor costs in
developing countries.

Since the 1960s there has been an important change in the geographical location of mill consumption. The
proportion of the world's cotton processed in Europe, North America and Japan declined from 62% in
1960 to 33% in 1990 as these countries faced increasing costs of labor and other inputs. Not only has
there been a decline in the proportion of the world's cotton processing which takes place in Western
Europe and Japan, but absolute tonnages of mill consumption in these countries also declined. Most of
the increase in mill consumption since 1960 has been concentrated in Asian countries, notably China
(Mainland and Taiwan) and Pakistan, as well as Korea and Thailand. Processing of cotton has played in
recent years an important part in the development of developing countries, as it had in earlier years in
Europe and Japan.

International Trade

Trade in Raw Cotton

Trade in raw cotton is largely unhindered by restrictions such as quotas, import bans, or large tariffs.
Cotton flows relatively freely between producing countries and those processing countries with a deficit
of lint. In some cases, however, producing countries limit exports of their raw cotton in order to promote
their domestic processing and create barriers to imports of raw cotton to protect domestic production. In
other cases, exports may receive special treatment to clear stocks from countries which subsidize
production.

Total world trade in raw cotton has expanded at a slower rate than production and consumption over
recent decades, indicating an increase in the proportion of lint consumed by mills within the cotton
producing countries. In 1960/61, global exports amounted to 36% of aggregate global production; in recent
years, this proportion has been around 30%, and reached as low as 26% in 1990/91. Expressed as a
proportion of production, exports from
many developing countries in Africa, Figure 8
South America, and the former USSR
declined between 1960/61 and 1990/91,
as processing capacity developed.
Exports from the United States increased
from 46 to 50% of production, and
increases were also recorded by Sudan 20 80

and India. 15 60

The geographical pattern of trade flows 10 40

between countries has also changed 20

markedly, reflecting largely the relocation
of much of the world's processing 1960 1965 1970 1975 1980 1985 1990
capacity, as well as the more dispersed
Trade as a percent of production Production Trade
pattern of production. Imports into
western Europe shrank from 40% of the
.
Figure 9 Figure 10

WORLD COTTON IMPORTS

1990

Indonesia 7%
West Europe 23%

Japan 12% Others 36%

Korea 8%
Thailand East Europa 8%

world total in 1960/61 to 23% 30 years later (figure 7), while Japan's share dropped from 21% to 12%
during the same period. At the same time, imports by a number of developing Asian countries have
expanded markedly. Indonesia's share of world imports increased from almost nil to 6.5%, Korea's from

Figure 11 Figure 12

1% to 8%, and Thailand's from almost nil to 6%.

The United States remains by far the dominant exporter, but its share of global trade declined, from 40%
in 1960/61 to 33% in 1990/91. Egypt's share of world exports also dropped dramatically. At the same
time, West African countries, Pakistan and Australia have risen to prominence as cotton exporters in the
period since 1960/61, reflecting expanded production. In other countries which increased production over
the period, such as India and the former USSR, mill consumption also expanded. India's exports remain
quite small relative to production, and exports from the former USSR remained largely unchanged during
the 1980s. Since 1990/91, however, mill consumption in the former Soviet republics declined and exports
increased.

As a result of these changes, developed countries as a whole are becoming net exporters of raw cotton to
developing countries, a reversal of the pattern which existed prior to the late 1980s.
Trade in Textile Manufactures

Trade in textile manufactures reflects trends in processing and consumption. The volumes imported by the
major consuming countries of Europe, North America and Japan increased strongly in the last 30 years,
as processing developed in both the producing and in the non-producing textile processing countries of
Asia. Thus, the Far East has become a major textile exporting region, and the largest in the case of cotton
textiles. The processing which remains in developed countries is generally of a specialized nature, taking
advantage of the high technological capabilities of those countries.

Figure 13 Figure 14

Trade in textiles is subject to a set of quota restrictions under the Multi-Fibre Arrangement (MFA). These
restrictions were established theoretically to allow developed countries time to adjust to increased
production in developing countries with new processing capacity, but have practically served to limit the
expansion in trade between developing and developed countries. The institutional structure of trade in
textiles has been under negotiation in the Uruguay Round of GATT. It has been proposed that the MFA
should be placed under the umbrella of GATT and that the quotas should be replaced by tariffs which
should progressively be reduced over a ten year period. Such changes, if agreed and implemented, would
provide considerable scope for increases in textile trade in the future. However, as any new arrangements
are expected to be phased in over 10 years or more, it is unlikely that a GATT agreement on textile trade
would have a large impact in the period to 2000. On the other hand, it must be noted that substantial
changes have occurred in world textile trade under the existing MFA, despite its restrictions, and that
further changes might be expected regardless of any reform.

The Role of Cotton in the Economies of Developing Countries

The production of cotton is considerably less concentrated geographically than was the case 30 years ago.
The production and export of cotton have played a significant part in the economies of many developing
countries. There is, however, quite some diversity between countries.
10

Cotton has long made a substantial contribution to the economies of some traditional cotton producing
countries, such as Egypt and Pakistan, and it continues to do so. India is a large and established cotton
producer, although cotton production amounts to a somewhat smaller proportion of that country's large
and diverse economy. In Mali, and other African countries such as Chad and Côte d'Ivoire, cotton has
become an important contributor to national income and to the value of exports in recent decades.

In many developing countries, exports of raw cotton are constrained because the domestic processing of
cotton has expanded. Thus cotton is increasingly exported from these countries in the form of fabrics and
clothing. During the 1980s, Pakistan's mill consumption doubled, India's grew by 40% and Turkey's by
60%.

In addition to cotton producing countries are those countries, largely in East and South East Asia, which
import and process raw cotton for export as manufactured textiles or clothing. Indeed, cotton processing
is increasingly becoming concentrated in developing countries. Thus, processing, as well as production
of cotton, is an important activity in many developing economies. With 65% of the world's cotton
production and mill consumption located in developing countries, cotton is an important contributor to the
economic development of those countries.
 11

Table 1
VALUE OF COTTON PRODUCTION AND EXPORTS. SELECTED COUNTRIES
Value: of Cotton Value of Cotton
Production * Exports
Country/Year Million Aspercent Million As percent
US Dollars of GDP US Dollars of all exports
$ % $ %
Argentina
1981 193 0.15 29 0.32
1989 187 0.31 86 0.90
Colombia
1981 146 0.40 93 3.16
1989 155 0,39 40 0.69
Guatemala
1981 157 1.82 107 8.69
1989 43 0.51 29 2.59
Egypt
1981 1284 5.24 457 14.14
1989 1391 1.94 275 10.70
India
1981 2277 1.24 101 1.20
1989 3880 1.42 70 0.44
Mali
1981 62 4.52 61 39.29
1989 126 6.15 125 46.13
Pakistan
1981 1210 3.65 526 18.25
1989 1569 3.66 938 19.84
Tanzania
1981 78 1.32 78 12.67
1989 101 3.59 78 30.10
Turkey
1981 827 1.43 348 7.41
1989 785 0.98 134 1.15
Zimbabwe
1981 95 1.47 88 6.23
1989 137 2.30 96 7.38
* Value of production estimated on the basis of export unit values
 II
Cotton Market: Developments During the 1980s

Over the last 15 years cotton reversed the trend of the previous two decades and regained popularity.
Several factors are believed to have played a role in the reversal.

Promotion programs initiated in the 1970s in various developed countries can be associated with cotton
increasing market share from 47% in 1978/79 to just over 48% in 1988/89 and 49.5% in 1990/91. These
programs guided consumers in establishing consumption patterns compatible with new environmental
concerns and lifestyles.

Cotton prices in relation to other textile Figure 15

fibers also played a role. Prices of
polyester, the main competing fiber, WORLD MARKET SHARE OF COTTON
declined fairly consistently during the Percent
75
1960s and early 1970s, making cotton
prices relatively higher. Improved yields 70
certainly contributed to lower cotton
65
prices, but the cycles of cotton prices,
common to virtually every agricultural 60

commodity traded in international 55

markets, determined the extent of the
structural change of the textile market
over the 1980s. Indeed, average cotton 45

prices of 49 c/lb in 1985/86 (compared to 40

an average of 73 c/lb in the last two
35
decades) were followed by an 60/61 65/66 70/71 75/76 80/81 85/86 90/91
unprecedented increase in cotton
consumption from 16.5 to 18.3 million
tons in 1986/87.

Between 1978 and 1988, consumption of all textile fiber increased at an average annual rate of 2.6%,
while cotton textile fiber consumption increased an average of 2.8% a year'.

World cotton production rose from 16.6 million tons in 1980/81 to 21 million in 1991/92, while
consumption grew by a smaller amount, resulting in a rise in stocks during the 12-year period of 4 million
tons. World cotton trade rose from 4.4 million tons to 6 million, although one million tons of the increase
represented trade between former USSR republics. Excluding trade within the former USSR, world cotton
exports rose to just 5.1 million tons but declined as a proportion of mill consumption between 1980/81
and 1991/92.

'As this document was being prepared for printing, textile fiber consumption data to 1990 became available with
the publication of the 1992 edition of the FAO World Apparel Fibre Consumption Survey.
14

Production

Cotton is grown in over 80 countries, yet Figure 16

73% of world production in 1991/92
occurred in the five largest producers and COTTON PRODUCTION
92% of world production was in the DEVELOPED AND DEVELOPING COUNTRIES
Million tons
Northern Hemisphere. World cotton
30
production became more concentrated
during the 1980s; production in the five
largest producers, China (Mainland),
USA, India, Pakistan and Central Asia
rose from 59% of the world total in
1980/81 to 77% in 1991/92. The major
increases in production between 1980/81
and 1991/92 occurred in China - 80/81 84/85 88/89 92/93
(Mainland), USA, India and Pakistan,
and production also increased in Developed 0
Francophone Africa, Australia, Greece, Eastern Europe and former USSR included as developed countries
Syria, I uricey, ruraguay and i-irgenuna;
cotton production declined in Central
Asia, Mexico, Brazil, Egypt, Central America, Peru, Colombia and Israel.

Production rose during the 1980s in the largest countries for different reasons. Cotton production increased
three-fold in China (Mainland) between 1979/80 and 1984/85 because farm prices were increased and
individual land holders were granted increased autonomy in making production and marketing decisions.
Production in China fell after 1984/85 as procurement prices were reduced but still remained higher than
in the 1970s.

Cotton production in the USA and India Figure 17

rose because of increased yields.
Harvested area in the USA fell from 5.35
million hectares in 1980/81 to 3 million
in 1983/84, a year affected by falling
prices and drastic government programs
to restrict production. US cotton area
increased after 1983/84 but was still
lower than in 1980/81 by the end of the
decade. Nevertheless, US production rose
from 2.4 million tons in 1980/81 to 3.8
million in 1991/92.

Cotton area in Pakistan increased almost every year during the 1980s and yields rose also, resulting in a
tripling of production to 2.1 million tons between 1980/81 and 1991/92. Increased area resulted from rising
 15

cotton prices and superior returns relative to competing crops. The profitability of cotton production in
Pakistan was enhanced by rising yields.

Among the countries where cotton production declined the most during the 1980s were the new republics
of Central Asia whose economies were disrupted by the political upheavals affecting the USSR in the late
1980s, and cotton yields were affected negatively by inefficient production practices. Cotton production
declined sharply in Mexico in 1991/92 because of the combined effects of lower international cotton prices
and changes in domestic agricultural policies favoring competing crops. Declining cotton prices also
affected production in Central America, Peru and Colombia in 1991/92. Cotton production declined in
Brazil during the 1980s because of shifts in area to oilseeds. The Government of Egypt held producer
prices for cotton below market levels during the 1980s to encourage textile production, resulting in
reduced producer interest in growing cotton.

Between 1950/51 and 1991/92, world Figure 18

cotton production rose at an average
annual rate of 2.1% or 260,000 tons,
though with considerable year-to-year
variation. One way to measure annual
variation is the difference between actual
production each year and a 5-year
moving average, which over this period
was 690,000 tons. However, the annual
variation in production increased after
1974/75. Between 1952/53 and 1974/75,
the average difference between actual
production and a 5-year moving average
was 380,000 tons; since 1975/76, actual
production has differed from a 5-year
moving average by 1.14 million tons per
year on average. The increasing variation
in world production after 1974/75 coincides with changes in agricultural policies of the USA and China
(Mainland). The USA switched from a program involving acreage allotments to the current set of policies
involving target prices and loan rates in
1973/74, and the Government of China
(Mainland) instituted the household Figure 19
contract system in place of more coercive
WORLD COTTON AREA
methods of managing cotton production Million Hectares
in 1979/80. 50

Between 1950/51 and 1992/93, world

45
cotton area averaged 33 million hectares
and ranged between 29 million and 39
40
million; there has been no upward or
downward trend in world area. As a
percentage of total area devoted to major
crops worldwide, cotton area averaged
4.3% and ranged between 3.8% and
4.8% during 1961/62 and 1992/93.
Cotton's share of world crop area tended
to fall during the 1960s and 1970s as
production of oilseeds and vegetables 50/51 60/61 70/71 80/81 90/91
16

increased. Rising prices for cotton Figure 20

relative to prices of competing crops after
WORLD COTTON YIELDS
1986 led to a rise in cotton's share of Tons/Ha
world crop area.

World cotton yields rose at an average 0.6

annual rate of 2%, 8 kilograms per

0.5
hectare, between 1950/51 and 1991/92.
World yields rose slower than average 0.4

during the late 1970s and early 1980s,

0.3
but jumped 100 kilograms per hectare to
548 between 1983/84 and 1984/85. A 0.2
record world yield of 595 kilograms per
0.1
hectare was achieved in 1991/92. Should
world cotton area remain at an average of
50/51 60/61 70/71 80/81 90/91
33 million hectares while yields continue
to rise at 2% a year from the most recent
5-year average of 564 kilograms per hectare, yields in 2000/2001 would climb to 660 kilograms per
hectare, and world production would reach 22 million tons. Cotton demand in 2000 is forecast at more
than 22 million tons, assuming average world economic growth and the maintenance of cotton's share of
world fiber consumption. To reach consumption forecasts, the average world yield will need to rise by
more than 8 kilograms per year during the 1990s.

Mill Consumption

Cotton is consumed in every country, although mill use occurs predominantly in Asia and the Western
Hemisphere, with these two regions accounting for 70% of world use.

Growth of cotton mill consumption during the 1980s was higher in developing countries than in the
developed ones, reflecting not only increased domestic needs due to higher population growth and per
capita incomes, but also the cost of production differential that permitted, during the decade, a larger
portion of cotton finally consumed in developed countries being processed in developing countries. These
events evolved particularly in favor of Asia where mill consumption of cotton increased 4.6% a year and
final consumption of cotton increased 3%
a year between 1978/79 and 1988/89 Figure 21
compared to a world average annual COTTON MILL CONSUMPTION
growth of 3%.
DEVELOPED AND DEVELOPING COUNTRIES
Million tons
Developing countries as a whole, 30
increased mill consumption 4.3% during 25
the decade ending in 1988, while
developed countries mill consumption

R IPP!JIPIPPI
increased 1% during the same period,
with mill consumption declining in
Canada, France, Netherlands, United
Kingdom and Sweden. Among developed
countries, only Germany, Italy and 80/81 84/85 88/89 92193

Portugal increased mill consumption at a

Developed E Developing
rate above 4%.
Eastern Europe and former USSR included as developed countries
 17

Mill consumption of cotton is less

concentrated than production; the five Figure 22
largest consuming countries, China
(Mainland), USA, India, Pakistan and
Brazil, account for 58% of world cotton
use. Of the ten largest cotton
consumers, only Russia (sixth) and
Japan (tenth) do not produce cotton.
During the period between 1980/81 and
1991/92, cotton use grew the most in
China (Mainland), Pakistan, USA,
India, Indonesia, Thailand, Turkey,
Brazil, China (Taiwan) and Italy; the
largest declines occurred in the former
USSR, Japan, Yugoslavia, France,
Romania, Poland, Bulgaria, the United
Kingdom and Hungary.

World cotton use rose at an average

annual rate of 2.0%, 287,000 tons per year, between 1950/51 and 1991/92, although there have been three
distinct periods within the last four decades. Between 1950/51 and 1973/74, world cotton use rose steadily
at an average rate of 2.3% per year. Between 1974/75 and 1983/84, consumption growth slowed to 1.5%
per year, reflecting slower world economic growth. Between 1983/84 and 1986/87, world cotton use
jumped higher by 3.6 million tons and reached 18.3 million tons, but, during the six seasons since
1986/87, there has been little growth in world use. Because of the steep increases in cotton use during the
1984, 1985 and 1986 seasons, the average rate of growth between 1984/85 and 1991/92 was 2.4% per
year, similar to the average rate during the 1950s, 1960s and early 1970s. Because consumption was flat
between 1986/87 and 1991/92 while the world average yield rose from 521 kilograms per hectare to 595
kilograms, stocks of cotton rose relative to consumption and prices fell to below average.

Trade in Raw Cotton

Figure 23
World cotton imports rose from 4.5
WORLD RAW COTTON TRADE
million tons in 1980/81 to 5.4 million Percent of world consumption
tons in 1988/89. The increase in world 40
trade was a result of an unprecedented
rise in consumption during the period.
However, as a percentage of mill use, 35
trade in raw cotton fell from 32% in
1980/81 to 31% in 1988/89. Mill use of
cotton increased at higher rates in cotton 30

producing countries than in cotton

importing countries.
25

Between 1988/89 and 1991/92, world

cotton trade gradually fell to 5 million
tons or 27% of world mill consumption.
Decreases of cotton consumption in
European non-producing countries were only partially offset by gains in Far East non-producing countries.
Cotton consumption in Europe fell almost by 1 million tons between 1988/89 and 1991/92, with Eastern
18

Europe and former USSR accounting for Figure 24

most of the decline. Market reforms and
major changes in terms of trade between SHARE OF WORLD IMPORTS
countries in this region were the major FAR EAST ASIA *
Percent
reasons for the drop in cotton demand 60
and trade.
50
During the past decade, the share of
importing countries in Far East Asia rose
from 35% in 1980/81 to 45% in 1991/92. 40

The most significant increases in imports

took place in Indonesia and Thailand, 30
where imports rose in each country by
270,000 tons between 1978/79 and
201 I I I •

1991/92. China (Taiwan) increased 80/81 82/83 84/85 86/87 88/89 90/91
imports by 100,000 tons during the same Not including China (Mainland), India and Pakistan

period. Imports rose in all other countries

in the region except Japan, where imports
fell by over 100,000 tons. Figure 25
SHARE OF WORLD IMPORTS
Western Europe's share of world imports WESTERN EUROPE
increased from 21% in 1980/81 to 25% Percent

in 1985/86, but decreased again to 17% 40

in 1991/92; imports by France and the

:
UK fell substantially, while Italy,
Germany, Portugal, Spain and Greece
increased imports of cotton. East
European imports during the same period
fell by almost 470,000 tons. The share of
East European imports fell from 17% in
10
1980/81 to 6% in 1991/92.

With more than 70 countries exporting 0

I I

80/81 82/83 was 86/87 88/89 90/91

cotton at the beginning of the 1980s,
65% of world exports came from the
USA, USSR, Pakistan, Turkey and Egypt. The USA accounted for about 30% of world cotton exports
throughout the 1980s. The US Cotton Program adopted in 1985 was an important factor in maintaining
US share of world exports. The Soviet Union was another major exporter, accounting for about 20% of
world trade. The collapse of the USSR and COMECON led to a decline in exports from Central Asia in
the beginning of the 1990s. The Central Asian share of world exports fell to below 13% in 1991/92.
Cotton exports are an important economic activity for the newly independent states in Central Asia and
the major source of hard currency for Uzbekistan, Turkmenistan and Tadjikistan. Pakistan accounted for
3% of world exports in 1978/79. Pakistan's importance as an exporter rose during the 1980s; it exported
3% of world trade in 1978/79, 10% in 1988/89 and 12% in 1991.

Important gains were experienced by other exporting countries. Exports from Francophone Africa rose
from 180,000 tons in 1980/81, or 4% of world trade, to more than 500,000 tons, 10% of world trade in
1991/92. Similarly, Australia, which exported 32,000 tons in 1978/79, increased exports to 501,000 tons,
just below 10% of world trade in 1991.
 19

Because of higher growth of domestic Figure 26

mill consumption compared to
NET EXPORTS OF RAW COTTON *
production, a number of major exporters
CHINA (MAINLAND)
decreased exports substantially during the Million tons
decade; some even became net importing
countries. China (Mainland) changed its
position from being a net importer to a
0.5
net exporter and vice versa several times
during the decade. In 1980/81, China
(Mainland) was a net importer of more -.'
than 750,000 tons. To keep up with
increasing domestic consumption, the
Government of China (Mainland)
introduced incentives to cotton producers I I I I I
-1
in 1984/85, which resulted in a bumper 80/81 82/83 84/85 86/87 88/89 90/91 92/93
crop of more than 6.2 million tons, * Exports minus Imports

exceeding consumption by 2.7 million

tons and resulting in record ending
stocks. China (Mainland) exported more Figure 27
than 600,000 tons during 1985/86 and NET EXPORTS OF RAW COTTON *
1986/87 and 500,000 tons in 1987/88. TURKEY
Because of the high level of stocks, the Million tons
government did not encourage high
cotton production in the late 1980s,
production eventually fell, and cotton 0.5
imports became inevitable to supply the
growing domestic textile industry. China
0
(Mainland) had average net imports of
cotton of 240,000 tons between 1989/90
and 1991/92.

Significant changes in exports were also

experienced in Turkey, Brazil, India and 80/81 82/83 84/85 86/87 88/89 90/91 92/93
* Exports minus Imports
Mexico. Turkey which exported 200,000
tons in 1978/79, became a net importer
of 10,000 tons in 1991/92. Brazil, which
Figure 28
was a net exporter of 180,000 tons in
1980/81, became a net importer of NET EXPORTS OF RAW COTTON *
110,000 tons of cotton in 1991/92. BRAZIL
Million tons
Depending on the size of the crop, Indian
exports fluctuated during the decade from
230,000 tons in 1986/87 to 11,000 tons
in 1991/92. India imported 50,000 tons in 0.5
1991/92. Mexican exports declined from
175,000 tons in 1980/81 to 50,000 tons 0
in 1991/92. In 1992/93, Mexico became
a net importer.
.0.5 -

A substantial decline in exports from

Egypt, an extra-fine cotton producer,
80/81 82/83 84/85 86/87 88/89 90/91 92/93
from 170,000 tons in 1980/81 to 16,000 Exports minus imports
20

tons in 1991/92 is likely explained by a Figure 29

loss of market share due to price
NET EXPORTS OF RAW COTTON *
competition from other countries,
MEXICO
especially the United States, and a Million tons
decline in demand from Eastern Europe
for extra-fine cotton.
0.5 -

End-use Consumption
0

Consumption of cotton at the end-use

level benefitted during the 1980s from .0.5 -
income per capita gains, lower prices
relative to other fibers and a favorable
-1
perception by consumers. World cotton 80181 82183 84185 86/87 88/89 90191 92/93
* Exports minus imports
end-use consumption increased at an
average annual rate of 3% between 1978
and 1988, almost 1% above the average Figure 30
growth rate of all textile fibers. END-USE COTTON CONSUMPTION
DEVELOPED COUNTRIES
Not only is cotton increasingly being Million tons
processed in developing countries, but
14
final consumption of cotton has also
increased at higher average annual rates 12

than in developed countries. Final 10

consumption of cotton increased 3.5% in
developing countries and 2.5% in
developed countries between 1978 and 61
1988. Duplicating the different rates of
economic growth, end-use consumption
of cotton increased at the highest rates
in developing countries of Far East Asia
1964 1968 1972 1976 1980 1984 1988
(4.6%) and in Japan (5.3%) during the
decade. Within developing countries,
only Africa and several countries in
Figure 31
Latin America, where the 1980s have
been labelled the lost decade of
economic growth, experienced declines
of cotton and all textile fibers end-use
consumption.

With markedly different population

structures and growth, per capita cotton
consumption has, however, continued
growing at higher rates in developed
countries than in developing ones. In
1978, 3.1 kilograms of cotton out of 6.6
kilograms of all textile fibers were
consumed per person in the world, 2
kilograms out of 3 kilograms in
developing countries and 6.2 kilograms
 21

out of 16.5 kilograms in developed Figure 32

countries. By 1988, 3.6 kilograms of
END-USE COTTON CONSUMPTION PER CAPITA
cotton out of 7 kilograms of all textile
WORLD
fibers were consumed per person in the Million tons
world, 2.3 kilograms out of 3.5 kilograms 6
in developing countries and 7.5
kilograms out of 17.9 in developed
countries.

In developing countries, all textile fiber

consumption increased at somewhat

:IPIHN
higher growth rates during the decade 2

and cotton lost market share from 66% in

1978 to 58% in 1988. As the process of
gg
industrialization takes place in developing
countries, increased production and 1964 1968 in 1976 1980 1984 1988

subsequent availability of chemical fibers

has become economically feasible.
Figure 33
In contrast, cotton's market share in
developed countries increased from 38%
in 1978 to 42% in 1988. Market share
increases through 1988 were particularly
strong in Japan (from 37.4% in 1978 to
45.6% in 1988) and Europe (from 35.7%
in 1978 to 40.1% in 1988). However,
recent data compiled by FAO shows a
marked decline of cotton's market share
in Japan (37% in 1990) and Italy (from
46.7% in 1988 to 43.2% in 1990), while
cotton in the USA continues to gain
market share from 32% in 1980 to 40%
in 1990.

Trade in Cotton Manufactures

Figure 34
The growth patterns of mill and final
consumption of cotton between 1978/79
and 1988/89 resulted in an 8% increase
of cotton textile net imports in developed
countries mirrored by similar increases in
cotton textile exports in developing
countries.

Within developed countries, net imports

increased most significantly in Japan
(27.7%), Italy (16%), The USA (12.5%)
and Austria (11.7%). Germany was the
only developed country where net
imports of cotton manufactures declined
(0.3%) during the period. Spain and
22

Portugal are the only two developed Figure 35

countries with net exports of cotton
manufactures. NET IMPORTS OF COTTON MANUFACTURES
Million tons
4
Within developing countries, only the
Republic of Korea and Colombia
experienced declines in net exports of
cotton manufactures between 1978/79 ocountrles
and 1988/89. The major increases were
experienced in Indonesia (30%), Thailand 0

(14%), India (11.4%), and Pakistan -1

(11.3%). - Developing countries
-2

-3

Prices 1978 1980 1984

" 1986 1988

World cotton prices, as measured by the

Cotlook A Index, fluctuated more during
Figure 36
the 1980s than in previous decades.
These fluctuations, however, were not COTLOOK A INDEX
outside the boundaries which characterize USC/lb
120
average fluctuations of commodity prices I

traded in large volumes in international 100

markets. 80

60
Changing macroeconomic conditions in
the early 1970s, external to commodity 40

markets, contributed to a nominal 20

increase in prices and, therefore, in part 0
to increased volatility. Nonetheless, price 50/51 60/61 70/71 80/81 90/91

fluctuations were mostly the result of Moving average * A Index

specific circumstances in commodity
markets. * Five year centered moving average

Since the mid 1970s, the movement of

cotton prices has been mainly determined Figure 37
by supply and demand conditions in the
world market, and the level of cotton COTLOOK A INDEX AND INVERTED
stocks in relation to mill use has moved WORLD STOCKS TO USE RATIO*
US c/lb Ratio
in tandem with cotton prices.
100 3.5

An event that altered the price formation 80

3

mechanism of the cotton market during 2.5

the 1970s, was the integration of China 60
2
(Mainland) into the economy of the rest
40
of the world. China (Mainland), the 1.5

largest producer and consumer of cotton, 20

70/71 775 78/79 82/83 86/87 90/91
rapidly became the largest textile
exporting country. Changes in the net Stocks to use ratio A index
trade position of China (Mainland) have
* 1/(stocks/use)
 23

an effect on stocks in the rest of the world and, therefore, on cotton prices.

Between 1977/78 and 1979/80, net imports by China (Mainland) increased from 64,000 tons to 900,000
tons, stocks ouside China (Mainland) declined from 5.5 million tons to 5 million, and consumption
increased from 10.5 million tons to 11 million tons. As a result, cotton prices rose 20 cents during the
three year period and the Cotliok A Index averaged 85 US c/lb in 1979/80.

In 1980/81, the average Cotlook A Index reached a record 94 US c/lb. Cotton production in many
countries fell by small amounts between 1979/80 and 1980/81, but it was a decline in US production due
to poor weather conditions that accounted for most of the decline in production outside China (Mainland).
Cotton consumption, reacting to slow economic growth, increased by only 80,000 tons. As a result, world
stocks declined to 34% of mill use. Net imports by China (Mainland) fell to 770,000 tons in 1980/81 and
were not a factor in the rise in prices that year.

In 1981/82, the world economy was in recession and cotton consumption declined 60,000 tons. Net
imports by China (Mainland) declined 200,000 tons and world stocks increased to 41% of mill use. The
average Cotlook A Index fell to 74 US c/lb in 1981/82. The Cotlook A Index rose to 88 US c/lb in
1983/84 as world production declined and consumption recovered.

By 1985/86, the Cotlook A Index averaged 49 US c/lb. China (Mainland) had become a net exporter of
600,000 tons of cotton; higher prices in previous years accelerated production and, despite rapid growth
of consumption, world cotton stocks increased to 68% of mill use.

In reaction to low prices during the previous year, production declined from 17.4 million tons in 1985/86
to 15.3 million in 1986/87, while consumption increased from 16.5 million tons in 1985/86 to 18.3 million
tons in 1986/87. World cotton stocks declined to 44% of mill use and the Cotlook A Index rose to 62 US
c/lb.

Unlike most other commodity markets, the world cotton market enjoyed relatively high prices at the end
of the 1980s. The A Index averaged 82 US c/lb in 1989/90 and 83 US c/lb in 1990/91. Despite the
economic collapse of Eastern Europe and the former USSR, which led to a drastic cotton consumption
decline in the region, consumption elsewhere was strong and declines of world cotton consumption were
small. China (Mainland) was again a net importer and world stocks declined to 33% of mill use.
 III
Modelling the World Cotton Market

The projections presented in this document are based on a global partial equilibrium model for cotton
which uses a set of supply and utilization accounts in which all elements are converted into cotton lint
equivalents. Model components of production and end-use of cotton determine the equilibrium price and
the level at which cotton production is equal to consumption. In addition, two further model components
were developed. Firstly, mill consumption of cotton was modelled to provide for the specific influences
determining output at the intermediate step of industrial processing. Projected trade in raw cotton was
derived from estimates of production and mill consumption, and net trade in cotton textiles was derived
from mill consumption (assumed equal to the production of textiles) and end-use consumption. Secondly,
in order to determine the market share of cotton and adjust end use consumption of cotton, consumption
of other textile fibers and end-use consumption of all textile fibers were modelled.

The universe of the textile market for modeling purposes is composed of cotton and wool as natural fibers,
and cellulosic and synthetic as chemical fibers.

Forty countries accounting for more than nine-tenths of world production and three-fourths of
consumption are explicitly included in the model.

Core Model: Production and End-use Demand for Cotton

Production

Harvested area and yield were modelled as separate elements. In general, cotton area was considered to
be a function of cotton prices, prices for competing farm products, the previous year's area and, in some
cases, a trend factor. Crops competing with cotton for planted area vary from country to country but are
usually comprised of cereals, rice, sugar cane and oilseeds. Typically, area was determined as follows:

1) AH = b0 + b1 AH 1 + b2PP + b3PP I + b4PC + b5PC I + e

where,

AH refers to area harvested, PP to the producer price of cotton, PC to the producer price of the competing
product(s), t denotes the current year's value and t-1 the previous year's. All variables were expressed in
natural logarithms, thus enabling the coefficients to be interpreted as elasticities.

Yields were modelled as a function of input prices, producer price of cotton, a trend factor, and lagged
yields as a proxy for capacity constraints such as input availability and limits to irrigation capacity. No
input price variables were found to be statistically useful explanatory variables. At the estimation stage,
dummies were included to account for unpredictable exogenous events in the past (weather, etc.), and to
im

provide an unbiased estimation of the other parameters, but no dummy variables were included in the
equations used to generate the forecasts. Typically, yields are determined as follows:

2) Y= b0 + b1 PP I + b2 T +b3D +b6Y 1 + e

where,

Y refers to yields, PP to the producer price of cotton, t to the current year and t-1 to the previous year.
D represents a dummy and T a trend variable.

Production of seed cotton is derived from the product of area and yield. For the conversion to lint
production, a given set of country specific ginning ratios is applied to projected seed cotton production,
which are assumed to remain unchanged over the projection period. The objective in these projections is
to capture the trend in production over future years. No attempt is made to capture the timing or
magnitude of cyclical highs and lows; rather the object has been to project the underlying trend in market
variables, around which cyclical and random fluctuations may be expected to occur.

End-use Demand for Cotton

Demand for cotton consumer goods was assumed to be a function of income, population, cotton prices
and prices of competing products. In the vast majority of equations, the model exhibited statistically
significant coefficients and good fits, and were therefore considered to describe consumer behavior
adequately.

The equations for final consumption of cotton are typically specified as follows:

3) CTC = b0 + bI GDP + b2CRP I + b3CTC I + e

where,

CTC refers to per capita final consumption of cotton, GDP indicates Gross Domestic Product per capita,
CRP is the ratio of the cotton price (Cotlook A Index) to an index of non-cotton fiber prices, the subscript
t refers to the current year and t- 1 to the previous year. All variables are expressed in natural logarithms.

Market Clearance and International-to-domestic Price Linkage

The equilibrium price of cotton, represented by the Cotlook A Index is determined endogenously in the
model. However, since it was assumed that producers respond to producer prices of cotton and consumers
implicitly to the A Index, it was necessary to establish a link between the two. To make this link, a price
transmission equation was estimated for each country modelled. The price transmission coefficients
obtained reflect the various artificial (e.g., producer price policies, trade barriers) and natural obstacles
(e.g., geographic location of a particular country, available infrastructure), which are responsible for the
imperfect linkage between the A Index and the domestic producer price. Therefore, for a country without
any significant trade barrier of any kind, it can be expected that a change in the world market price will
translate directly into a change in the domestic producer price; in a country isolated from the world
 27

market, changes in world prices will have less direct impacts on domestic prices. The use of this price
transmission equation in the model, with coefficients estimated from past data and applied to the future,
implies an assumption that any changes in agricultural policies and other factors influencing the
transmission of world prices to producers will not affect the pattern of production within the projection
period. For the formal linkage of the two prices, the following model was estimated:

4) PP11 = b0 + b1PP LI + b2Aindex + b3Aindex 1 + e

where,

PP1 is the producer price in country i, Aindex is the Cotlook A Index of cotton prices; and the subscripts
t and t-1 indicate the current and previous time periods respectively. Again, all variables were expressed
in natural logarithms.

A market clearing mechanism is used to ensure that world demand and supply find equilibrium. The
market clearing mechanism in the model is an iterative procedure, where the necessary changes in the
equilibrium price are provided by a simplified Newton algorithm, an equilibration procedure repeated year
by year until the desired time horizon is reached (year 2000).

Additional Components

Mill Consumption

A model of mill consumption was developed in order to estimate the consumption of raw cotton in
individual countries, and consequently to permit the estimation of trade flows in raw cotton and in cotton
textiles.

Demand for cotton can, in a simplified way, be considered a two step process, i.e., demand for raw cotton
or mill consumption and demand for final cotton goods or end-use of cotton. Cotton fiber is used primarily
as a raw material for the textile industry and converted in many complex operations into a variety of
intermediate products that make up cotton goods. Textile manufacturers usually have a choice of fibers
that can be used for their products. The decision to use a particular fiber or mixture of fibers is usually
based on the desired properties of the specific product, relative prices of competing fibers (mainly
polyester and rayon fibers as well as wool) and the preferences of their customers.

To account for these influences, mill consumption of cotton is assumed to be driven by the growth of
demand for cotton products (including the domestic market for all countries and regions modelled and the
export market for a number of textile exporting countries), by relative prices of cotton and non-cotton
fibers, as well as by a number of other economic factors mostly incorporated into the lagged dependant
variable of the respective equations. The growth of demand for cotton products is captured through GDP
per capita. Prices for other fibers are reflected through a price index which incorporates the evolution of
prices for polyester, rayon and wool, and is weighted by the level of demand of these fibers. In addition,
recognizing the importance that exports have in the textile sector of many countries, GDP per capita in
the respective export market was implemented successfully in many equations, particularly for the fast
growing economies in South East Asia.

Assembling the above mentioned influences in an equation, mill consumption may be estimated as follows:
FX

5) MC1 = b0 + bI GDPD + b2 GDPE + b3CRP I + b4MC1I + e

where,

MC refers to mill consumption, GDPD to Gross Domestic Product per capita in the country, GDPE to
gross domestic product in the export market, CRP to the ratio of the A Index to the index of non-cotton
fibers, and the subscripts t and t-1 to the current year and the previous year, respectively. Again, all
variables are expressed in natural logarithms, with the coefficients being elasticities.

In order to maintain consistency between the aggregate level of mill consumption and the previously
generated production and end-use projections, the results of the mill consumption equations were adjusted
on a pro rata basis for the individual countries.

End-use of All Textile and Non-cotton Textile Fibers

Equations for all textile fiber and non-cotton textile fiber consumption were designed. For many countries,
the shares of the textile market resulting from the cotton and non-cotton equations reproduced the trends
established in the historical data. However, for a number of countries, overestimation of one of the fibers
resulted in unlikely market share results. In such cases, the all textile fiber equation and the cotton or non-
cotton fiber equation were used to determine market share. Final consumption of both cotton and non-
cotton were compared and adjusted, if necessary, to final consumption of all textile fibers.

End-use of all textile fibers is assumed to be a function of income, population and prices of textiles. An
equational form of this function was determined as follows:

6) ATC = b0 + bI GDP 1 + b2TPI 1 + b3ATC I + e

where,

ATC refers to final consumption per capita of all textile fibers; GDP to Gross Domestic Product per
capita; TPI to an index of textile fiber prices which incorporates the evolution of prices for cotton,
polyester, rayon and wool, and is weighted by the level of demand of these fibers and deflated by the
IMF's world consumer price index; the subscript t refers to the current year and t-1 to the previous year.
All variables are expressed in natural logarithms.

End-use non-cotton textile fiber consumption was modelled along lines similar to cotton end-use
consumption; the non-cotton equations returned equally satisfactory statistical results. Formally, non-cotton
textile demand (NTC) was determined as follows:

7) NTC = b0 + b I GDP I + b2 RPN I + b3NTC I + e

where,

NTC refers to consumption per capita of non-cotton textile fibers; GDP to Gross Domestic Product per
capita; RPN to the ratio of an index of non-cotton fibers to the A Index; the subscript t refers to the
current year and t-1 to the previous year. All variables are expressed in natural logarithms.
 Appendix
Elasticities and Exogenous Variables Used in the
Forecasting Model

Equations for each component of the model were estimated, as described above. The most appropriate
equation for each country was determined on the basis of a priori expectations and empirical results, and
incorporated in the forecasting model. Further adjustments were made to some coefficients, within the
range of the standard errors of estimation', where the forecasts produced by the original model were
judged to be implausible.

The elasticities used in the forecasting model, some the direct result of empirical estimation, some
modified, are contained in tables 2 to 7.

In order to form forecasts, assumptions were made relating to the values of exogenous variables in the
model, i.e., economic variables which influence the production and consumption of cotton, and which are
not produced within the model.

Projections of GDP per capita were taken from several sources, primarily the World Bank, and population
projections were those of the United Nations. The values of these exogenous variables are reproduced in
table 8. The ratio of cotton prices to prices of non-cotton textiles is assumed to continue the trend of the
last 15 years and increases in the all textile fiber price index are assumed in tandem with inflation.

21n the case of China, the original estimation produced projections outside the limits of what might be judged as
reasonable and the resulting adjustments to the coefficients exceeded the limits of the standard errors.
30

Table 2
ELASTICITIES USED IN PROJECTING AREA
Area Wheat Maize Sorghum Sorghum A Index
Countries/Regions t-1 Price Price Price Price

Argentina 1.000 -0.200 -0.200 0.100

Brazil 1.000 -0.040 -0.039 0.100
Colombia 0.122 0.100
Mexico 0.122 -0.752 0.553
Paraguay 0.237 0.521

Egypt -0.316 0.101

Syria 0.546 -0.150 0.100
Turkey 1.000 -0.199 0.224

China 0.428 -0.693 0.939

India -0.145 -0.145 0.146
Pakistan -0.194 0.100

United States -0.207 0.571

Grece -1.684
Spain -1.000

Former USSR -1.000 0.500

Australia -1.000 0.500

Israel -1.000 0.500

South Africa -1.000 0.500

Table 3
ELASTICITIES USED IN PROJECTING YIELD
Area A Index
Countries/Regions t-1 t-1

Argentina -0.364 0.028

Brazil 0.060
Colombia
Mexico

Egypt 1.000
Syria -0.247 0.247
Turkey -0.249

China 0.487 0.500

India 0.220 0.425
Pakistan

United States 0.210

Grece
Spain

Former USSR 0.911 0.948

Australia -0.183
 31

Table 4
I ATI(ITI tIFfl IN Ppn.IFeTIN( Mill I CONSUMPTION
A lndexf GOP per GOP per Mill
CountrieslRegions Non-ootton capita capita Consumption
fiber price Donestie Export t-1
t-I Market Market
WORLD -0.112 0.525 0.641

DEVELOPING -0.091 0.932 0.449

Africa -0.107 0.154 1.007

Latin America -0.014 0.291 0.755

Argentina -0.224 0.234 0.277 0.716
Brazil -0.128 0.502 0.645
Colombia -0.101 0.282 0.786
Mexico 0.096 0.483 0.479 0.876
Paraguay -0.200 0.200 0.800
Other -0.200 0.500 0.800

Egypt 0.068 0.319 0.643

China -0.072 1.277 0.340

Hong Kong -0.128 0.210 0.780
India -0.088 0.267 0.772
Indonesia -0.098 1.495 0.687
Korea 0.123 0.729 0.820
Malaysia -0.282 0.721 1.098
Pakistan -0.250 0.349 0.938
Philippines -0.265 0.371 0.863
Singapore -0.148 0.353 0.665
Thailand -0.180 1.462 0.593

DEVELOPED -0.081 0.048 0.725

North America -0.241 0.097 0.743

Canada -0.102 0.947

United States -0.246 0.111 0.752

Western Europe -0.105 0.056 0.631

EEC -0.115 0.052 0.644

Belgium -0.237 0.751
Denmark -0.371 0.777
France -0.035 1.084
Germany 0.027 0.880
Italy -0.178 0.318 0.703
Netherlands -0.091 1.025
Portugal -0.089 0.519 0.679
Spain -0.120 0.210 0.711
United Kingdom -0.046 1.025
Austria -0.049 0.659
Finland 0.204 0.412 0.898
Norway -0.469 0.129 0.697
Sweden -0.223 0.837
Switzerland -0.036 0.168 0.848
E. Europe & Former USSR -0.070 0.112
Australia -0.142 0.869
Japan -0.111 0.298 0.465
South Africa -0.154 0.381 0.542 0.559
32

Table 5
ELASTICITIES USED IN PROJECTING END-USE COTTON
GDP per A Index Non-cotton A Inde End-use
Countrie/Regions capita t- 1 fiber price Non-cotton cotton
t-1 t-1 1-1
DEVELOPING
Africa 0.281 1.198
Latin America
Argentina -0.091 0.668
Brazil 1.760 -0.131
Colombia -0.478 0.755
Paraguay 1.000 -0.500 1.000
Near East
Egypt 1.000 -0.500 1.000
Syria 1.000 -0.500 1.000
Turkey 1.000 -0.500 1.000
Far East
China 0.252 0.498
India 1.000 -0.500 1.000
Indonesia 0.169 -0.295 0.681
Korea 0.836 -0.567 0.883
Malaysia 1.000 -0.500 1.000
Pakistan 1.000 -0.500 1.000
Philippines 0.395 -0.419 0.876
Singapore 0.900 -0.500 1.000
Thailand 0.240 -0.092 0.632
DEVELOPED
North America
Canada 0.861 -0.202
United States 1.875 -0.270
Western Europe
EEC
Belgium 1.935 -0.305 0.372
Denmark 1.034 -0.243 0.557
France 1.559 -0.172
Germany 1.078 -0.119
Greece 1.829 -0.260 0.100
Ireland 1.000 -0.500 1.000
Italy 1.731 -0.542 0.350
Netherlands 2.652
Portugal 2.633 -0.435 0.100
Spain 1.413 -0.551 0.500
United Kingdom 1.787 -0.117
Other Western Europe
Austria 2.909 -0.173
Finland 1.112 -0.235 0.050
Norway 1.256 -0.108 0.357
Sweden 0.623 -0.371 0.450
Switzerland 2.697 -0.152
E.Europe & Former USSR 0.900 -0.080 1.000
Australia 1.000 -0.500 1.000
Other Developed
Israel 1.000 -0.500 1.000
Japan 0.742 -0.195 0.360
South Africa 3.424 -0.228 0.254
 33

Table 6
11 ASTICITIF tISFfl IN PROJECTING END-USE NON-COTTON
GDPper ::::Non_cotton.. Non-cotton A Index! End-use
Countries/Regions capita fiber price Al ndex i-i non-cotton
t_i t1
DEVELOPING 3.248 -0.441
Africa 0.681 -0.289 0.207
Latin America 1.470 -0.315 0.262
Argentina 0.909 0.435
Brazil 0.969 -0.541
Colombia 2.497 -0.326
Mexico -0.121
Near East
Egypt 0.591 0.406
Syria 1.000 -0.500 1.000
Turkey 1.000 -0.500 1.000
Far East
China 1.559 -0.661 0.632
Hong Kong 1.000 -0.500 1.000
India 2.125 -0.364
Indonesia 1.090 -0.400 0.593
Korea Rep 1.324 -0.883 0.368
Malaysia 0.494 -0.407 1.251
Pakistan 0.857 -0.368 -0.154
Philippines -0.566 0.315
Singapore 1.000 -0.500 1.000
Thailand -0.290 0.613
Other Developing 0.459 -0.238 0.249
DEVELOPED
North America 1.846 -0.463 0.173 -0.689
Canada 1.420 -0.486
United States 0.907 -0.168
Western Europe 0.462 -0.473
EEC 0.400 -0.381 0.296
Belgium -1.299 0.506
Denmark 1.543 -0.608
France 1.013 -0.335 0.393
Germany 1.000 -0.500 1.000
Greece 0.441 -0.367 0.420
Ireland 4.070 -1.388
Italy 2.635 -1.313
Netherlands 1.000 -0.500 1.000
Portugal 3.725 -0.445
Spain 1.620 -0.308
UK 1.000 -0.500 1.000
Other Western Europe 0.346 -0.424 0.230
Austria -1.035 0.725
Finland 1.000 -0.500 1.000
Norway 0.640 -0.417 0.154
Sweden 0.403 -0.435
Switzerland 1.000 -0.500 1.000
Others 1.019 -0.373
E.Europe & Former USSR 0.270 -0.080 1.000
Other Developed
Australia 1.771 -0.223 -0.426
Japan 0.488 0.232
South Africa 4.856 -0.174
34

Table 7
ELASTICITIES USED IN PROJECTING END-USE TEXTILE FIBERS
GDP per World Developed
Countries/Regions capita fiber countries counines Texti'e fibers
pnce index fiber fiber 1-1
t- 1 price o-idex price index
t-1
WORLD 0.766 -0.122 0.211
DEVELOPING 1.041 -0.076
Africa -0.141 1.068
Latin America 0.374 -0.062 0.471
Argentina 0.627 -0.129 0.285
Brazil 0.320 -0.140 0.605
Colombia 0.599 -0.347 0.407
Mexico 0.310 0.540
Near East
Egypt 0.164 0.625
Far East
China 0.473 -0.038 0.520
Hong Kong 0.494 -0.482 0.586
India 0.127 -0.038 0.581
Indonesia 0.713 0.344
Korea Rep 0.542 0.526
Malaysia 0.202 0.535
Pakistan -0.129 0.714
Philippines -0.105 0.602
Singapore -0.753 0.412
Thailand 0.312 -0.190 0.678
DEVELOPED 0.642 -0.162 0.129
North America 1.120 -0.330
Canada 0.661 -0.290 0.317
United States 1.192 -0.327
Western Europe 0.450 -0.130 0.433
EEC 0.516 -0.121 0.381
Belgium 0.310 -0.128 0.661
Denmark 0.739 -0.252 0.366
France 0.771 -0.119
Germany 0.247 -0.091 0.698
Greece 0.441 -0.135 0.426
Ireland 0.418 -0.261 0.342
Italy 0.926 -0.290 0.300
Netherlands 0.972 -0.124 0.499
Portugal 0.562 -0.476 0.320
Spain 0.374 -0.127 0.667
UK 0.990 -0.216
Other Western Europe 0.699 -0.161 0.424
Austria 0.586 -0.230 0.566
Finland 0.770 -0.213 0.286
Norway 0.891 -0.368
Sweden 1.165 -0.438
Switzerland 1.745 -0.180
Others 0.718 -0.434 0.242
E.Europe & Former USSR 0.270 -0.080 1.000
Other Developed
Australia 1.156 -0.145
Japan 0.906 -0.220
South Africa 1.331 -0.246 0.478
 35

Country/Region

WORLD
DEVELOPING
Africa
:1.1 _
:1..:.
Average

100
100
100
GDP per capita

•.87t089.:.I:..I:: 2000
Index Index
117.5
137.4
106.0
Table 8
PROJECTIONS OF GDP PER CAPITA AND POPULATION GROWTH

Annual
Change

1.35
2.68
0.48
Average
7to89
000
5114275
3879313
493033
Populatkn

2000
000
6262778
4947879
718586
%
Annual
Change

1.70
2.05
3.19
Latin America 100 118.9 1.45 430380 538446 1.88
Argentina 100 107.4 0.60 31535 36238 1.17
Brazil 100 121.9 1.66 144428 179487 1.83
Colombia 100 128.9 2.14 31727 39397 1.82
Mexico 100 125.5 1.91 84887 107233 1.97
Paraguay 100 128.2 2.09 4039 5538 2.66
Other 100 119.0 1.46 133763 170553 2.05
Near East 100 105.2 0.42 265638 366259 2.71
Egypt 100 110.1 0.80 50047 64210 2.10
Syria 100 98.1 -0.16 11656 17826 3.60
Turkey 100 144.0 3.08 53675 66789 1,84
Other 100 95.0 -0.43 150260 217434 3.13
Far East 100 167.6 4.40 2684180 3316827 1.78
China 100 186.3 5.32 1105744 1299180 1.35
Hong Kong 100 160.6 4.03 5685 6336 0.91
India 100 137.4 2.68 818872 1041543 2.02
Indonesia 100 161.7 4.09 177437 218661 1.76
Korea 100 215.2 6.59 42049 46403 0.82
Malaysia 100 176.5 4.85 16988 21983 2.17
Pakistan 100 137.1 2.66 114795 162409 2.93
Philippines 100 134.7 2.51 59456 77473 2.23
Singapore 100 192.1 5.59 2648 2997 1.04
Thailand 100 229.6 7.17 54124 63670 1.36
Other 100 123.9 1.80 286381 376172 2.30
Other Developing 100 134.8 2.52 6082 7761 2.05
DEVELOPED 100 126.6 1.99 1234962 1314899 0.52
North America 100 121.8 1.66 271982 294584 0.67
Canada 100 121.9 1.67 25945 28488 0.78
United States 100 121.8 1.66 246037 266096 0.66
Western Europe 100 134.8 2.52 397849 408092 0.21
EEC 100 136.8 2.65 341699 349796 0.20
Belgium 100 139.5 2.81 10262 10243 -0.02
Denmark 100 127.5 2.04 5130 5153 0.04
France 100 135.1 2.54 55891 58423 0.37
Germany 100 143.4 3.05 78135 78494 0.04
Greece 100 128.3 2.10 10005 10193 0.15
Ireland 100 131.7 2.32 3532 3848 0.72
Italy 100 140.2 2.86 57446 57756 0.04
Netherlands 100 127.5 2.04 14754 15829 0.59
Portugal 100 152.8 3.60 10285 10587 0.24
Spain 100 147.7 3.30 38981 40667 0.35
United Kingdom 100 125.2 1.89 57276 58603 0.19
Other Western Europe 100 121.3 1.62 56150 58296 0.31

&
Austria 100 142.0 2.96 7595 7613 0.02
Finland 100 126.1 1.95 4947 5077 0.22
Norway 100 136.2 2.61 4208 4361 0.30
Sweden 100 115.1 1.18 8445 8683 0.23
Switzerland 100 123.5 1.77 6595 6808 0.27
Others 100 95.3 -0.40 24359 25754 0.47
E. Europe Former USSR 100 87.5 -1.11 384492 412049 0.58
Oceania 100 120.4 1.56 19843 22717 1.13
Australia 100 121.4 1.63 16540 19055 1.19
Other developed 100 149.2 3.39 160797 177457 0.82
Israel 100 128.0 2.08 4437 5321 1.52
Japan 100 159.1 3.94 122607 128470 0.39
South Africa 100 103.9 0.32 33753 43666 2.17
 Iv
Prospects for the 1990s
The interaction of population, income and prices will determine the level of cotton and all textile fiber
consumption in the remainder of the 1990s. World population, growing at about 1.7% per year, will
account for most of the gains.

World income, measured by GDP, has Figure 38

increased at lower rates during the last 3
END-USE TEXTILE FIBER CONSUMPTION
decades from an average annual rate of
WORLD
4% during the 1960s to 3% during the Million tons
1980s. GDP estimates used in these 66
projections assume an average growth of
2.9% during the 1990s, corresponding to 50

1% growth of income per capita.

40

A similar growth pattern during the last 30

three decades was experienced by textile
I I
III
I
fiber consumption, which increased at an 20

annual average rate of 3.7% during the

1960s, 3.1% during the 1970s and 2.7%
10 I
Iiliii
during the 1980s. Between 1978 and
1976 1980 1984 1988 1992 ProjectIon 2000
1988, world textile fiber consumption per
capita increased from 6.6 kilograms to
7.3. Continuing this trend, textile fiber consumption per capita is forecast to increase to 7.6 kilograms by
2000.

As the rate of growth of textile fiber Figure 39

consumption continued to slow during
the 1980s, final consumption of cotton,
that began regaining popularity in the
mid-1970s, increased at higher rates and
gained market share. Although the
current projections suggest that cotton
will continue to grow above the rates of
other textile fibers, the difference is not
as wide and gains in market share
between 1988 and 2000 are forecast to be
minimal and the level of market share
similar to that estimated for 1992. Most
of the gains of cotton's popularity during
the 1980s were recorded in developed,
countries. However, evidence of recent
market share losses in certain developed
countries, incorporated into the projections model, results in an increase of cotton's market share only in
North America.
38

World cotton consumption and Figure 40

production are forecast to rise at average
annual rates of 2% and 2.3% from 1988
to 2000, reaching 23 million tons. The
forecast rates of growth in the world
cotton market are similar to the averages
during the period between 1950 and
1990, reflecting an expectation that world
economic conditions will be similar to
average conditions prevailing throughout
the period between 1950 and 1991.

However, the forecasts imply stronger

growth in consumption between 1992
and 2000. World cotton consumption was
essentially flat between 1986/87 and
1992/93 at less than 19 million tons per
year; for consumption to rise to 23
million tons by 2000, average annual Figure 41
increases of 2.3% will be needed. Cotton
END-USE COTTON CONSUMPTION
consumption increased at an average
DEVELOPED AND DEVELOPING COUNTRIES
annual rate of 3% between 1978 and Million tons
1988. The forecasts also imply that 30

cotton will continue to account for nearly 25

half of world fiber mill use during the
20
1990s, with cotton's market share
projected to be 48.4% by 2000, only 15

slightly higher than in 1988 and about 10

the same share estimated for 1992.

Most of the growth in world cotton 0

Projection 2000
1976 1980 1984 1988 1992
consumption between 1988 and 2000 is
expected to come from increases in Eli Developed • Developing
population; world final cotton
consumption per capita is forecast to
grow from 3.5 kilograms in 1988 to 3.7 Figure 42
kilograms in 2000. However, cotton
consumption between 1988 and 1992 was
stagnant at less than 19 million tons, and
consumption per capita in 1992 was just
3.3 kilograms. The projections indicate
that world cotton consumption per capita
will increase by .4 kilograms between
1992 and 2000, resulting from world
economic growth above the rate of
growth of population.

World production is forecast at 23

million tons in 2000, 2.2 million tons
greater than the 1991/92 record. Based
on average levels of harvested area, the
 39

world average cotton yield in 2000 will Figure 43

need to reach nearly 700 kilograms per
COTTON PRODUCTION
hectare, compared with the 1991/92
WORLD
average of 595 kilograms per hectare, in Million tons
order to reach the forecast of production. 30
An extrapolation of a regression line
through yields from the 1950s does not 25

reach 700 kilograms, suggesting that

20
above-average increases in yields will be
called for during the 1990s. 15
M
Australia, Pakistan, China (Mainland), 10

India, the USA, Turkey and Syria are

expected to increase cotton production
above the world estimated growth of I I

Projection 2000
2.3% during the projection period. 80/81 84/85 88/89 92/93

Production in Latin America, Europe, and

Israel is forecast to decline.
Figure 44
Developed Countries

Final consumption of all textile fibers in

developed countries is forecast to
increase at an average annual rate of
1.2% to reach 26 million tons in 2000.
Cotton's market share in developed
countries is forecast to decrease from
41.7% in 1988 to 40.3% in 2000. Among
developed countries, the USA is forecast
to lead final cotton consumption growth
and, with 1.4% average annual growth
between 1988 and 2000, will account for
about half of the additional 1 million
tons consumed in developed countries by
2000.
Figure 45
Mill consumption is expected to increase
at an average annual rate of only 0.2%. COTTON PRODUCTION
The highest increases are forecast for DEVELOPED COUNTRIES *
USA (3%), Italy (1.2%), Portugal (2.5%), Million tons

Sweden (1.7%) and Switzerland (2.2%) 30

and major declines in mill consumption 25 -

are forecast in Japan (6.5%), United
Kingdom (10.9%), and Netherlands 20 -

(12.8%).
15 -

Cotton production in developed countries 10

is forecast to increase from 6.2 million

tons in 1988, or 36% of world
production, to 7.8 million tons in 2000,
or 34% of world production. The highest
0,
1"
80/81 84/85 88/89
pa
i
92/93
* Date includes Eastern Europe and former USSR
I 1,
Projection 2000
40

production increases are forecast for Australia (6.3%) and USA (2.9%) and declines are forecast for Israel
and Europe.

European Community

Cotton mill use in the EC is forecast at Figure 46

1.3 million tons by 2000, only some
30,000 tons less than the 1987-89
average, but final consumption of cotton
is forecast to rise to 2.7 million tons. EC
cotton mill use rose to nearly 1.4 million
tons in 1986/87, benefiting from low
prices for cotton and a surge in consumer
demand for cotton products; EC mill use
has fallen since 1986/87 and is estimated
at 1.1 million tons in 1992/93. Under
pressure from textile imports originating
in Eastern Europe, the former USSR,
North Africa, Turkey and the Middle
East, cotton mill use in many EC
countries may continue declining during
the 1 990s, even as domestic consumption
rises. Mill consumption levels are
expected to be maintained by projected increases in Italy, Portugal, and Spain.

Japan

Cotton mill use in Japan began declining Figure 47

from more than 750,000 tons after
1988/89 and is estimated at 500,000 tons COTTON MILL CONSUMPTION
JAPAN
in 1992/93. Despite the reduction in Million tons
domestic yarn production, stocks of I
cotton yam remain higher than producers
would like, the spinning margin between 5

prices for cotton and yam is one of the

4
tightest since 1980 and closing of textile
mills continues. Cotton mill use in Japan 3
may be less than 400,000 tons by 1995
and as low as 300,000 tons in 2000. In 2
contrast, final consumption of cotton may
rise to 1.4 million tons, for a cotton
textile trade deficit of more than 1
million tons. 80/81 84/85 88/89 92/93 Projection 2000

United States of America

USA production is forecast at 4.1 million tons by 2000, higher than production in 1991/92 of 3.8 million
tons, and a substantial increase over the average level of US production in the 1980s. US cotton area rose
after 1983/84 in response to changes in government cotton policies and exceeded 5 million hectares in
1991/92; restrictive government programs and efforts to reduce cotton program payments to growers may
 41

limit US area to no more than 5 million Figure 48

hectares during the 1990s. US yields
would need to rise only to the 1987/88
level of nearly 800 kilograms per hectare
by 2000 in order to produce 3.9 million
tons on 5 million hectares.

US cotton mill use is estimated at 2.4

million tons by 2000, while final demand
is estimated at 3 million tons, and net
imports of cotton textiles at 600,000 tons.
US mill use rose between 1985 and 1992
because of strong demand for leisure
clothing and consumer preferences for
cotton products. Average economic
growth of 3% per year during the 1990s
will allow growth in final demand for
cotton products to average more than 2%
from 1988 to 2000. Profit levels in the Figure 49
US textile industry were record high in COTTON MILL CONSUMPTION
the early 1990s, and new investment is UNITED STATES
leading to expanded cotton spinning Million tons

capacity. US cotton mill use may 6

continue to benefit during the 1990s from

5
increased trade with Mexico.
4
Former USSR

Production in Central Asia is forecast at

2.7 million tons, 700,000 tons above
current levels. Cotton area in Central
Asia fell from 3.5 million hectares in
1987/88 to 2.8 million in 1992/93 but are
expected to remain at current levels, or
perhaps rise, for the rest of the 1990s.
80/81 885 88189 92/83
I 1
Projection 2000

Cotton yields in the former USSR Figure 50

declined after 1974 because of poor farm
management and depletion of soils. COTTON PRODUCTION
Political restructuring may result in better CENTRAL ASIA *
Million tons
resource management and rising yields in
10
the 1990s, resulting in increased
production. No growth in Central Asian
mill use is expected by 2000.

Cotton use in Russia is expected to rise

several hundred thousand tons and return
to the average level of 1987-89 by 2000;
similar growth in cotton use is expected
in the other importing republics of the
former USSR. Cotton use in Russia fell 88/89 92/93 Projection 2000
80/81 84/85
by 40% between 1988/89 and 1992/93, * Cotton producing countries in the former USSR
42

and additional declines may occur for Figure 51

several years as economic restructuring
continues and obsolete equipment is
discarded. However, Russian consumer
demand for clothing will need to be met,
and improved fortunes for the textile
industry will occur eventually. Russia
may also continue to be a small net
importer of cotton textiles.

Developing Countries

Final consumption of cotton is forecast to

continue growing faster in developing
countries than in developed ones. Only
Africa, among developing country
regions, is forecast to grow below world
annual average growth during the
Figure 52
projection period. Cotton's market share
in developing countries is forecast to COTTON MILL CONSUMPTION
remain at about 58%. DEVELOPING COUNTRIES
Million tons
30
Developing countries are forecast to
process 70% of the world cotton in 2000, 25
compared to 63% in 1988. As Far East
Asia is forecast to continue to expand its 20
domestic market and increase its share in
15
export markets, mill consumption in that
developing region is projected to increase 10
3.1%. Similarly, developing countries are
forecast to produce 66% of world cotton
in 2000 compared to 64% in 1988.
80/81 84/85 88/89 92/93 Projection 2000
China (Mainland)

Mill use in China (Mainland) is forecast Figure 53

to rise to 5.9 million tons by 2000, while
final demand is estimated at 5.1 million
tons, for net exports of cotton textiles of
814,000 tons. Consumer demand in
China is rising rapidly because of strong
economic growth, and most of the
growth in cotton use during the 1990s is
expected to satisfy domestic consumers.

Production in China (Mainland) is

estimated at 5.7 million tons in 2000.
Cotton production in China reached 6.3
million tons in 1984/85 and 5.7 million
in 1991/92 but was lower than 5 million
tons in all other years and has been
 43

below 4 million tons twice since Figure 54

1984/85. Between 1980/81 and 1992/93,
COTTON MILL CONSUMPTION
cotton area in China ranged between 4.3
CHINA (Mainland)
million hectares and 6.9 million; Million tons
increases in state procurement prices led 10
to increases in cotton area in the early
1980s and between 1990 and 1992, while 8
decreases in procurement prices were
associated with reduced area. 6
Liberalization of the cotton sector of the
China (Mainland) economy during the
1990s could lead to rising farm prices
and increased area. Cotton yields in
China reached 900 kilograms per hectare
in 1984/85 but have been lower each
season since and dropped below 700 80/81 84/85 88/89 92/93 Projection 2000

kilograms per hectare in 1992/93. The

frequent occurrence of floods, drought
and pest attacks, and slow advances in Figure 55
seed breeding, may make it difficult for COTTON PRODUCTION
farmers in China to consistently reach CHINA (Mainland)
yields above 900 kilograms during the Million tons

next eight seasons. An average yield of 10

875 kilograms and harvested area of 6.5

million hectares in 2000 would result in 8

production of 5.7 million tons.

Pakistan

Production in Pakistan is forecast at 2.5

million tons by 2000; the record for
production in Pakistan is 2.2 million tons
harvested in 1991/92. Cotton harvested
area and yields rose steadily during the
80/81 84/85 88/89 92/93
I 1,
Projection 2000

1980s but fell in 1992/93 because of

floods and the impact of the leaf curl Figure 56
virus. Because the virus is well
established, further gains in yields in
Pakistan may be difficult to achieve.
Cotton area rose at an average rate of
63,000 hectares per year after 1980/81
and reached 2.9 million hectares in
1991/92. A rise in area to more than 3
million hectares, combined with yields of
750 kilograms per hectare would result in
the production forecast for 2000.

Mill use in Pakistan is forecast to rise

toward 1.9 million tons by 2000, more
than double the average level of
consumption during 1987-89, while final
44

consumption is estimated at just 300,000 Figure 57

tons, for net exports of cotton textiles of
1.6 million tons. Cotton use in Pakistan
rose at an average rate of 87,000 tons, or
11% per year, during the 1980s because
of abundant domestic supplies of lower.
priced cotton and rising exports of cotton
yarn. The saturation of some markets for
yarn exports may result in slower growth
in Pakistan use during the 1990s, but
relatively rapid increases are likely to
continue nevertheless.

India

Indian production is forecast at 2.6

million tons in 2000, well above the
current record production of 2 million
tons. Indian cotton area may decline Figure 58
during the 1990s as land shifts to grains
and oilseeds in response to rising
domestic prices, however, gains in yields,
which averaged 11 kilograms per hectare
per year during the 1980s, are expected
to continue. Yields in 2000 of 340
kilograms per hectare, combined with
area of 7.6 million hectares, would result
in production of 2.6 million tons.

India may also experience faster

economic growth during the 1990s than
in the 1980s in response to liberalized
economic policies; faster economic
growth could lead to increased cotton use
and production. Indian cotton mill use
and final consumption are estimated at Figure 59
2.5 and 2.3 million tons by 2000,
suggesting average rates of increase of COTTON MILL CONSUMPTION
4% and rising domestic consumption per INDIA
Million tons
capita. As final consumption is projected
10
to grow faster than mill consumption,
most Indian textile production will be for
B
domestic sale.
a-
Other Developing
4 -
Cotton mill use in other developing
countries of Africa, Latin America, the
Near East and the Far East is forecast at
5.9 million tons in 2000, compared with
4.3 million tons, the three year average 80/81 84185 88/89 92/93
I,
Projection 2000
 45

centered in 1988. Particularly rapid Figure 60

growth is expected in Indonesia, Thailand
and the Near East where investment in
textile production is continuing. Much of
the increase in textile production in other
developing countries will be for domestic
consumption; final consumption in this
group of countries in expected to grow to
4.8 million tons in 2000 from 3.6 million
tons in 1988.

World Cotton Trade

World trade in raw cotton, estimated

from projections of production and mill
consumption, is projected to increase to
6 million tons and remain at 26% of
Figure 61
world consumption. Exports from
developed countries are forecast to grow IMPORTS OF RAW COTTON
1% a year to reach 3.4 million ton by DEVELOPED AND DEVELOPING COUNTRIES
2000, while exports from developing Million tons
10
countries, after declining from 2.5
million tons in 1988 to 2.1 million in 8
1991, are expected to reach 2.6 million
tons by 2000. Turkey, Syria, Australia, 6

Argentina, India, the Republics in Central 4

Asia, and the United States are expected
to increase cotton exports as a percent of 2
world total exports.
0
80/81 84/85 88/89 92/93 Projection 2000
Imports of cotton are forecast to grow the
fastest in Brazil, Indonesia, Malaysia, [] DEVELOPED • DEVELOPING
Thailand, and the Philippines. Declines in
cotton imports are expected in China
(Mainland), Hong Kong, Canada, France, Figure 62
Germany, Netherlands, the United
Kingdom, Austria, and Japan. EXPORTS OF RAW COTTON
DEVELOPED AND DEVELOPING COUNTRIES
Million tons
The projection of net trade in cotton 10
manufactures have been derived from
mill consumption and end-use demand 8
projection. The projections are based on
6
the assumption that current policies
affecting trade will remain unchanged.
By 2000, net exports of cotton
manufactures from developing countries
are estimated at 3.7 million tons, 0
80/81 84/85 88189 92/93 Projection 2000
compared with net exports of 3.2 million
in 1988. The largest growth in exports of
cotton manufactures is expected to occur L!DEVELOPED U DEVELOPING]
46

in Indonesia, Singapore, Pakistan, and Figure 63

Thailand. Japan, France, and Canada are
expected to show the largest growth in
cotton textile imports, while only the
United States is projected to decrease net
imports of cotton manufactures.
 47

Table 9
ACTUAL AND PROJECTED PRODUCTION OF RAW COTTON
• .
Aerage annual
Actual Projected growth rates
Countries/Regions 1978 1988 1991 2000 1978/1988::4984/2000
1,000 metric tons Percent

WORLD 13626 17435 20804 22951 2.5 2.3

DEVELOPING 7745 11233 13683 15161 3.8 2.5

Africa 490 803 817 832 5.1 0.3

Latin America 1711 1671 1574 1610 -0.2 -0.3

Argentina 180 250 225 319 3.4 2.1
Brazil 545 718 697 575 2.8 -1.8
Colombia 115 112 157 84 -0.2 -2.4
Mexico 341 240 181 181 -3.5 -2.3

Near East 1435 1399 1277 1761 -0.3 1.9

Egypt 440 369 291 376 -1.8 0.2
Syria 141 154 185 210 0.9 2.6
Turkey 509 568 561 801 1.1 2.9
Other 345 308 240 374 -1.1 1.6

Far East 4108 7360 10015 10958 6.0 3.4

China 2141 3978 5675 5711 6.4 3.1
India 1314 1888 2040 2646 3.7 2.9
Pakistan 592 1405 2193 2482 9.0 4.9

DEVELOPED 5881 6203 7121 7790 0.5 1.9

North America 2894 2896 3835 4095 0.0 2.9

United States 2894 2896 3835 4095 0.0 2.9

Europe 177 300 285 294 5.4 -0.2

Former USSR 2620 2636 2500 2771 0.1 0.4

Oceania 60 252 457 522 15.4 6.3

Australia 60 252 457 522 15.4 6.3

Other Developed 130 119 44 107 -0.9 -0.9

Israel 73 64 23 46 -1.3 -2.6
South Africa 57 55 21 61 -0.3 0.8
48

Table 10
ACTUAl AND PROJECTED MILL CONSUMPTION OF COTTON
• I.:. annual
Actual Projected growth rates
,
Oounfries/Regions 1978 1:968. 1991 2000 1978/1988 198/2000
1,000rnetrio.torlS •.Percent:
WORLD 13655 18348 18690 22951 3.0 1.9
DEVELOPING 7640 11684 12571 16089 4.3 2.7
Africa 223 308 355 405 3.3 2.3
Latin America 1065 1505 1430 1653 3.5 0.8
Argentina 105 129 147 146 2.0 1.0
Brazil 528 802 719 835 4.3 0.3
Colombia 78 92 104 123 1.7 2.5
Other 354 482 460 549 3.1 1.1
Near East 735 1088 1133 1401 4.0 2.1
Egypt 284 289 327 373 0.2 2.1
Syria 33 62 65 79 6.3 2.1
Turkey 289 473 575 609 5.0 2.1
Other 129 264 166 340 7.4 2.1
Far East 5616 8783 9653 12629 4.6 3.1
China 3060 4805 4720 5907 4.6 1.7
Hong Kong 215 239 200 136 1.1 -4.6
India 1225 1744 1879 2532 3.6 3.2
Indonesia 88 232 361 703 10.1 9.7
Korea 290 408 435 497 3.5 1.6
Malaysia 29 37 40 76 2.4 6.3
Pakistan 417 849 1334 1914 7.4 7.0
Philippines 29 58 50 104 7.1 5.0
Singapore 15 22 25 26 4.0 1.4
Thailand 113 269 390 559 9.0 6.3
Other 135 121 219 174 -1.1 3.1
DEVELOPED 6015 6665 6119 6863 1.0 0.2
North America 1460 1735 2110 2452 1.7 2.9
Canada 56 43 42 42 -2.7 -0.1
United States 1404 1693 2068 2410 1.9 3.0
Europe 1884 2079 1670 2068 1.0 -0.0
EEC 1090 1383 1158 1358 2.4 -0.2
Belgium 37 46 39 45 2.2 -0.2
France 182 144 100 58 -2.4 -7.3
Germany 172 301 178 249 5.8 -1.6
Greece 141 169 180 179 1.8 0.5
Italy 207 315 320 365 4.3 1.2
Netherlands 24 8 4 2 -9.9 -12.8
Portugal 113 187 150 251 5.1 2.5
Spain 111 146 144 163 2.8 0.9
UK 91 43 14 11 -7.4 -10.9
Austria 22 23 32 22 0.3 -0.4
Sweden 6 5 5 6 -1.4 1.7
Switzerland 47 65 61 84 3.3 2.2
Former USSR 1857 1989 1700 1865 0.7 -0.5
Oceania 22 22 28 25 0.2 1.0
Australia 22 22 28 25 0.2 1.0
Other Developed 793 839 687 453 0.6 -5.0
Jaoan 711 746 603 334 0.5 -6.5
 49

Table 11
A(TIIAI AMfl PPflJ('TflPit-JAI CflIJSIIMPTION OF COTTON
•
Average.annual
Actual Projected growth rates
CountrieRegions 1978 1988 2000 197811988 1988/2001)
•::::•... 1,000 metric. .tón Peret
WORLD 13663 17949 22951 2.8 2.1
DEVELOPING 6427 8412 12350 2.7 3.3
Africa 395 281 333 -3.3 1.4
Latin America 909 1251 1478 3.2 1.4
Argentina 111 104 123 -0.7 1.4
Brazil 380 651 737 5.5 1.0
Colombia 38 65 93 5.6 3.0
Other 379 431 525 2.0 1.7
Near East 700 768 1458 0.9 5.5
Egypt 194 142 299 -3.1 6.4
Syria 35 43 62 2.0 3.1
Turkey 185 276 501 4.1 5.1
Other 286 308 597 0.7 5.7
Far East 4423 6101 9068 3.3 3.4
China 2451 3625 5094 4.0 2.9
Hong Kong 91 38 43 -8.4 1.1
India 1147 1416 2292 2.1 4.1
Indonesia 83 164 252 7.0 3.7
Korea 99 259 350 10.1 2.6
Malaysia 20 30 65 3.9 6.7
Pakistan 180 155 268 -1.5 4.7
Philippines 28 82 112 11.3 2.6
Singapore 50 62 133 2.1 6.6
Thailand 85 148 225 5.7 3.6
Other 189 124 235 -4.1 5.5
DEVELOPED 7236 9538 10602 2.8 0.9
North America 1739 2764 3284 4.7 1.4
Canada 152 173 233 1.3 2.5
United States 1586 2591 3051 5.0 1.4
Europe 2526 3231 3580 2.5 0.9
EEC 1804 2456 2684 3.1 0.7
Belgium 65 68 72 0.3 0.5
France 287 364 395 2.4 0.7
Germany 521 693 702 2.9 0.1
Greece 61 78 91 2.5 1.3
Italy 242 468 544 6.8 1.3
Netherlands 90 116 150 2.6 2.1
Portugal 38 98 106 10.1 0.6
Spain 91 113 126 2.1 0.9
UK 266 380 403 3.6 0.5
Austria 36 62 77 5.6 1.9
Sweden 63 79 113 2.4 3.0
Switzerland 41 67 77 5.1 1.2
Former USSR 1984 2061 2000 0.4 -0.3
Oceania 131 159 222 1.9 2.8
Australia 102 137 196 3.0 3.0
Other Developed 856 1323 1516 4.4 1.1
Jacan 757 1211 1391 4.8 1.2
50

Table 12
ACTUAL AND PROJECTED SHARE OF COTTON

Countries/Regjons 1978 1988 2000

Percent

WORLD 47.3 48.1 48.4

DEVELOPING 66.3 58.1 58.4

Africa 60.5 52.3 43.1

Latin America 49.2 55.5 68.3

Argentina 56.7 54.4 55.4
Brazil 56.6 71.4 74.7
Other 35.3 34.9 46.4

Near East 58.3 48.4 64.8

Far East 69.8 60.5 61.5

China 75.4 61.1 62.1
India 81.8 73.3 65.3
Indonesia 33.0 40.0 45.0
Korea 26.7 33.1 40.0
Pakistan 75.8 64.6 70.0
Philippines 24.5 50.0 51.8
Thailand 59.5 74.6 87.0
Other 56.8 63.3 80.0

DEVELOPED 37.8 41.7 40.3

North America 32.0 39.3 39.4

Canada 31.8 32.5 33.6
United States 32.1 39.9 40.0

Europe 35.7 40.1 40.1

EEC 32.7 40.9 38.7
France 36.8 42.1 34.0
Germany 30.1 40.0 38.5
Italy 35.3 46.7 50.0
Netherlands 38.8 42.6 41.1
Spain 28.0 28.0 28.5
UK 27.9 34.4 28.9
Austria 27.5 51.2 53.7
Sweden 41.9 48.4 43.6
Switzerland 35.6 48.9 40.5

Former USSR 49.1 46.7 45.2

Oceania 26.0 38.4 36.2

Australia 37.3 38.8 36.2

Other Developed 36.3 44.8 37.7

Jaoan 37.4 45.6 38.4
 51

Table 13
ACTUAL AND PROJECTED FINAL CONSUMPTION OF ALL FIBERS
• . .............
.::AVerage annual
Actual Projected growth rates
CountrieWRegions 1978 1988 2000 197811988 1988/2000
1000 metnc tons F'ercnt

WORLD 28864 37351 47462 2.6 2.0

DEVELOPING 9701 14475 21155 4.1 3.2

Africa 653 538 771 -1.9 3.0

Latin America 1849 2255 2163 2.0 -0.3

Argentina 196 191 222 -0.3 1.2
Brazil 672 911 986 3.1 0.7
Other 981 1153 955 1.6 -1.6

Near East 1200 1588 2249 2.8 2.9

Far East 6341 10078 14741 4.7 3.2

China 3250 5932 8201 6.2 2.7
India 1402 1931 3508 3.3 5.1
Indonesia 252 409 559 4.9 2.6
Korea 371 782 876 7.7 1.0
Pakistan 237 239 383 0.1 4.0
Philippines 114 163 216 3.6 2.3
Thailand 143 198 259 3.3 2.2
Other 333 196 293 -5.2 3.4

DEVELOPED 19163 22876 26306 1.8 1.2

North America 5428 7032 8326 2.6 1.4

Canada 479 531 695 1.0 2.3
United States 4949 6501 7631 2.8 1.3

Europe 7075 8064 8917 1.3 0.8

EEC 5514 6004 6938 0.9 1.2
France 779 863 1161 1.0 2.5
Germany 1730 1733 1823 0.0 0.4
Italy 686 1001 1088 3.9 0.7
Netherlands 231 273 365 1.7 2.4
Spain 326 403 443 2.1 0.8
UK 955 1105 1395 1.5 2.0
Austria 130 120 143 -0.7 1.5
Sweden 150 164 259 0.9 3.9
Switzerland 114 137 190 1.8 2.8

Former USSR 4044 4411 4424 0.9 0.0

Oceania 273 413 614 4.2 3.4

Australia 273 354 542 2.6 3.6

Other Developed 2238 2955 4026 2.8 2.6

Japan 2027 2656 3624 2.7 2.6
52

Table 14
ACTUAl ANfl PRO.IFCTFD CONSUMPTION PER CAPITA OF COTTON
fera9e::aflflual
Actual PrOtected 9rOwth rates
CountrieslRegons 1978 1988 2000 1978/1988 1988/2000
Kilograms per capita Porcen

WORLD 3.1 3.5 3.7 1.2 0.4

DEVELOPING 2.0 2.2 2.5 0.7 1.2

Africa 1.0 0.6 0.5 -5.9 -1.7

Latin America 2.6 2.9 2.7 1.2 -0.5

Argentina 4.0 3.3 3.4 -1.9 0.2
Brazil 3.2 4.5 4.1 3.5 -0.8
Other 0.0 1.8 1.7 -0.8
0.0
Near East 3.4 2.9 4.0 -1.6 2.7
Egypt 4.8 2.8 4.6 -5.1 4.2
Turkey 4.3 5.1 7.5 1.9 3.2

Far East 1.9 2.3 2.7 1.6 1.6

China 2.5 3.3 3.9 2.8 1.5
India 1.7 1.7 2.2 0.2 2.0
Indonesia 0.6 0.9 1.2 5.1 1.9
Korea 2.6 6.2 7.5 8.8 1.7
Pakistan 2.2 1.3 1.6 -0.0 1.7
Philippines 0.6 1.4 1.4 8.8 0.4
Thailand 1.9 2.7 3.5 3.9 2.2

DEVELOPED 6.2 7.7 8.1 2.3 0.4

0.0
North America 7.0 10.2 11.1 3.8 0.8
Canada 6.4 6.7 8.2 0.4 1.7
United States 7.0 10.5 11.5 4.1 0.7

Europe 5.2 6.5 7.0 2.2 0.6

EEC 5.4 7.2 7.7 2.9 0.5
France 5.3 6.5 6.8 2.0 0.3
Germany 6.7 8.9 8.9 2.9 0.1
Italy 4.3 8.1 9.4 6.6 1.2
Netherlands 6.4 7.9 9.5 2.1 1.5
Spain 2.5 2.9 3.1 1.7 0.6
UK 4.7 6.6 6.9 3.5 0.3
Austria 4.7 8.1 10.1 5.6 1.8
Sweden 7.6 9.4 13.0 2.2 2.8
Switzerland 6.4 10.2 11.3 4.7 0.9

Former USSR 7.5 7.2 6.5 -0.4 -0.9

Oceania 7.1 8.0 9.8 1.3 1.7

Australia 7.1 8.3 10.3 1.6 1.8

Other Developed 5.8 8.2 8.5 3.5 0.3

Jaoan 6.5 9.9 10.8 4.2 0.8
 53

Table 15
ACTUAL AND PROJECTED CONSUMPTION PER CAPITA OF ALL FIBERS
.Average annual
Actual Projected growth rates
Countrie'Regions 1978 1988 2000 1978/1988 198200O
Kilograms per capita Percent

WORLD 6.6 7.3 7.6 1.0 0.3

DEVELOPING 3.0 3.7 4.3 2.1 1.1

Africa 1.7 1.1 1.1 -4.5 -0.1

Latin America 5.2 5.2 4.0 0.0 -2.2

Argentina 7,1 6.1 6.1 -1.5 0.1
Brazil 5.7 6.3 5.5 1.1 -1.1
Other 5.5 5.6 3.4 0.2 -4.0

Near East 5.8 6.0 6.1 0.3 0.2

Egypt 5.8 5.1 5.7 -1.3 0.9
Turkey 7.6 9.9 12.9 2.7 2.2

Far East 2.8 3.8 4.4 3.0 1.4

China 3.3 5.4 6.3 4.9 1.4
India 2.1 2.4 3.4 1.3 3.0
Indonesia 1.7 2.3 2.6 3.0 0.9
Korea 9.9 18.6 18.9 6.5 0.1
Pakistan 2.9 2.1 2.4 -3.1 1.0
Philippines 2.4 2.7 2.8 1.3 0.1
Thailand 3.1 3.7 4.1 1.5 0.9

DEVELOPED 16.5 18.5 20.0 1.1 0.6

North America 21.8 25.9 28.3 1.7 0.7

Canada 20.1 20.5 24.4 0.2 1.5
United States 22.0 26.4 28.7 1.9 0.7

Europe 14.7 16,2 17.4 1.0 0.6

EEC 16.5 17.6 19.8 0.6 1.0
France 14.5 15.4 19.9 0.6 2.1
Germany 22.1 22.2 23.2 0.0 0.4
Italy 12.2 17.4 18.8 3.6 0.6
Netherlands 16.5 18.5 23.1 1.2 1.8
Spain 8.8 10.3 10.9 1.6 0.4
UK 16.9 19.3 23.8 1.3 1.8
Austria 17.2 15.8 18.8 -0.8 1.4
Sweden 18.1 19.4 29.9 0.7 3.6
Switzerland 18.1 20.8 27.9 1.4 2.5

Former USSR 15.4 15.4 14.4 0.0 -0.6

Oceania 18.9 20.8 27.0 1.0 2.2

Australia 18.9 21.4 28.5 1.3 2.4

Other Developed 15.5 18.4 22.7 1.7 1.8

Japan 17.5 21.7 28.2 2.1 2.2
54 1Uw

Table 16
ACTUAL AND PROJECTED EXPORTS OF RAW COTTON
• :.• Average annual
Actual Projected growth rates
Countries/Regions 1978 1988
00.. 1991 2000 1,971988::1988/2000
1 metric tons Percent

WORLD 4553 5336 5025 5999 1.6 1.0

DEVELOPING 2009 2573 2155 2590 2.5 0.1

Africa 312 566 628 552 6.2 -0.2

Latin America 745 615 619 623 -1.9 0.1

Argentina 93 99 143 183 0.6 5.2
Brazil 24 125 60 40 17.9 -9.1
Colombia 41 30 55 30 -3.1
Mexico 188 83 54 83 -7.9 0.0

Near East 723 358 287 493 -6.8 2.7

Egypt 153 64 20 43 -8.3 -3.3
Syria 110 54 100 130 -6.9 7.6
Turkey 203 77 45 254 -9.3 10.5
Other 257 163 122 66 -4.5 -7.3

Far East 229 1034 621 922 16.3 -1.0

China 18 351 149 151 iJI 34.5 -6.8
5 India 43 75 11 135 ' 5.6 5.0
LPakistan 139 542 430 570 0 J 0.4

DEVELOPED 2544 2762 2870 3409 0.8 1.8

North America 1516 1482 1481 1686 -0.21 1.1

10 United States 1516 1482 1481 1686 -0.2 1.1

Europe 86 226 184 215 10.1 -0.4

Former USSR 854 750 684 982 -1.3 2.3

Oceania 32 250 501 498 23.0 5.9

Australia 32 250 501 498 23.0 5.9

Other Developed 56 54 20 28 -0.3 -5.2

Israel 47 50 16 24 0.6 -5.8
South Africa 2 4 4 4 7.3
 55

Table 17
ACTUAF AND PRO.]FCTED IMPORTS OF RAW COTTON
:•. Average annual
Actual Projected growth rates
Countrie$/Regions 1978 1988 1991 2000 1978/1988 1988/2000
1,000-metric tons Percent

WORLD 4555 5424 5159 5999 1.8 0.8

DEVELOPING 1887 2575 2963 3518 3.2 2.6

Africa 49 124 147 124 9.7

Latin America 82 224 323 666 10.6 9.5

Brazil 0 86 126 300 69.6 11.0

Near East 34 134 206 134 14.8

Egypt 15 40 61 40 10.3
Turkey 62 55 62

Far East 1723 2093 2287 2593 2.0 1.8

China 792 598 701 347 -2.8 -4.4
Hong Kong 262 215 184 -2.9
India 23 21 64 21 -0.6
Indonesia 92 238 363 689 10.0 9.3
Korea 312 446 392 496 3.6 0.9
Malaysia 37 38 76 6.3
Philippines 28 53 51 100 6.6 5.3
Singapore 27 28 29 0.6
Thailand 79 243 350 537 11.9 6.8
Other 122 165 84 111 3.0 -3.2

DEVELOPED 2668 2849 2196 2481 0.7 -1.1

North America 58 43 46 42 -2.9 -0.1

Canada 57 43 43 42 -2.9 -0.1

Europe 1812 1985 1456 1989 0.9 0.0

987 1261 975 1237 2.5 -0.2
France 197 147 120 68 -2.8 -6.2
Germany 194 336 185 305 5.6 -0.8
Greece 31 38 27 38 2.3
Italy 218 321 320 366 4.0 1.1
Netherlands 24 8 4 2 -10.4 -11.8
Portugal 117 192 160 255 5.1 2.4
Spain 64 105 73 105 5.1 0.0
UK 97 43 17 13 -7.8 -9.6
Austria 23 24 31 23 0.5 -0.4
Sweden 5 5 4 6 -1.1 2.1
Switzerland 51 66 62 85 2.5 2.2

Former USSR 70 75 60 75 0.7

Oceania 2 1 1 1 -9.5

Other Developed 726 745 633 374 0.3 -5.6

Jaoan 715 730 592 334 0.2 -6.3
56

Table 18
ACTUAL AND PROJECTED NET IMPORTS OF COTTON MANUFACTURES
Average annual
PtuaI Projected growth rates
Countries/Regions 1978 1988 2000 1978/1988 1988/2000
1 000 metric tons Percent

WORLD 8 -399 0

DEVELOPING -1212 -3272 -3739 10.4 1.1

Africa 172 -26 -72 8.8

Latin America -156 -254 -175 5.0 -3.0

Argentina 6 -25 -23 -0.6
Brazil -148 -151 -98 0.2 -3.6
Colombia -40 -27 -30 -3.8 1.0

Near East -35 -320 56 24.6

Egypt -90 -147 -74 5.1 -5.6
Turkey -104 -197 -108 6.6 -4.9

Far East -1193 -2682 -3561 8.4 2.4

China -609 -1180 -814 6.8 -3.0
Hong Kong -124 -201 -93 5.0 -6.2
India -78 -328 -240 15.4 -2.6
Indonesia -5 -68 -452 29.9 17.1
Korea -191 -150 -146 -2.4 -0.2
Pakistan -237 -694 -1646 11.3 7.5
Singapore 36 40 108 1.2 8.5
Thailand -28 -121 -334 15.7 8.8

DEVELOPED 1221 2873 3739 8.9 2.2

North America 279 1029 832 13.9 -1.8

Canada 96 130 191 3.1 3.3
United States 183 898 640 17.3 -2.8

Europe 642 1152 1512 6.0 2.3

EEC 714 1073 1327 4.2 1.8
France 104 220 337 7.8 3.6
Germany 349 392 453 1.2 1.2
Italy 35 153 179 16.0 1.3
Netherlands 66 108 148 5.0 2.7
Portugal -76 -89 -146 1.6 4.2
Spain -20 -33 -37 5.2 1.0
UK 175 337 393 6.8 1.3
Austria 13 39 55 11.3 3.0
Norway 20 35 44 5.5 2.1
Sweden 57 74 107 2.7 3.1

Former USSR 127 72 135 -5.5 5.4

Oceania 109 136 197 2.2 3.1

Australia 80 115 171 3.7 3.4

Other Developed 63 483 1064 22.5 6.8

Japan 46 466 1057 26.0 7.1