It was “white crisis.” However, it was music to the ears of Western cotton producers, particularly San Joaquin Valley growers.
Weather and delivery problems in areas producing high quality cotton – Africa, Central Asia and Australia – as well as weather problems in many areas of the U.S. Cotton Belt has created a world shortage of high quality now that only promises to tighten for cotton types produced in the irrigated West.
While wet harvest-time weather in many areas of the U.S. Cotton Belt jeopardized quality, weather conditions season-long, especially at harvest, were ideal in the West resulting in significantly better length and strength than the average both in California and Arizona, where micronaire levels were well below average.
Economists reporting on future cotton prices all reported at Beltwide that cotton prices are improving. March futures were trading at 14 cents higher than they were year ago when cotton merchant William B. Dunavant, Jr. gave his economic projections for the cotton crops ahead.
Marketing analyst O.A. Cleveland, speaking at a Bayer CropScience breakfast, predicted overall July, May and December futures will be 4 to 6 cents higher than they are now as overall cotton supplies tighten.
World textile mills have adequate cotton supplies for now, but will be poorly covered from March on, he said. That and, quality is playing a bigger role in cotton pricing. Strict low middling cottons are entering and era where they’ll draw discounts while mills start demanding cottons 1 1/8 to 1 ¾ with strengths of 30 grams per tex and higher.
Cottons fitting those parameters are FiberMax varieties, the Australian breed cottons now widely planted in most of the Belt. Mills, both domestically and internationally, are asking specifically for FiberMax fiber quotes. And they are being quoted 400 points on.
A nickel above that are SJV uplands, specifically Acalas cottons.
“SJV growths are doing extremely well in the world market right now,” said Cleveland, who projected that in the midst of this year’s “white crisis” SJV cash prices during this marketing year should accelerate faster than the average price of cotton, which will continue to rise, according to Cleveland.
This premium on high quality upland will create a shift from Pima cottons to Acalas next season, said Cleveland.
“Over the last four months world prices based on the five cheapest growths has gone from 49.15 to 56.50, which reflects a shortage of 31 and better qualities in world markets,” said Dunavant. “It will even get tighter in the spring of 2003.”