Vereniging ingelyf kragtens Artikel 21 / Association incorporated under Section 21

Date: 2 July 2010 Reference: 9/3/3/1

COTTON MARKET REPORT AS AT 1 JULY 2010

WEEKLY COTLOOK A INDEX

International AND CORRESPONDING SA "PRICES"
110 1600
105 1525
Based on the expected average world cotton 100
95
1450
1375

SA cent/kg "price"
price forecast of 78 US c/lb for 2009/10, the 90 1300

US cent/lb
85 1225
International Cotton Advisory Committee 80 1150
FUTURES 1075
75
(ICAC) forecasts an average Cotlook A index 70
US c/lb
1000
65 925
(an indicator of world prices) of 87 US c/lb for 60 850
55 775
2010/11, an increase of 12% over 2009/10 50 700
45 625
and 2 US c/lb up from last month’s forecast.

ay
07

08

09

M ar
05

06

10

D ct
Mec
O
N

N
As a result of the significant decline in stocks
JA

JA

JA

JA

JA

JA
A INDEX SA "PRICE" N.Y. FUTURES
this season, offers for cotton from the pvwadxfu

2009/10 crop shrunk during June 2010 and

due to the lack of quotations, the normal A
index was no longer quoted after 22 June.
The 2010/11 Cotlook A index (“Forward WORLD SUPPLY AND DEMAND
MILLION TONS
Cotlook A index”) is therefore the only index 28

published currently. 26

24

According to the ICAC, supplies of cotton will 22

remain tight until the start of the harvest of 20

the new crop in the Northern Hemisphere in 18

16
August. The ICAC expects world cotton
14
production to increase in 2010/11 to about 25
3

2
6

/0

/0

/0

/0

/0

/0

/1

/1

/1
/9

/9

/9

/9

/0

/0

/0

/0

million tons, up 14% from 2009/10. The

03

04

05

06

07

08

09

10

11
95

96

97

98

99

00

01

02

increase in production is a direct result of the pvwva

PRODUCTION CONSUMPTION

increase in cotton prices over the past year

as well as the declining prices of competing
grain and oilseeds crops.
WORLD TRADE AND STOCKS
The ICAC also expects world cotton 14 14

consumption to continue to recover in 13 13

STOCKS - MILLION TONS
TRADE - MILLION TONS

12 12
2010/11, growing by 2% to 24.9 million tons 11 11
due to continued global economic growth but 10 10

limited by higher cotton prices. China and 9 9

India are expected to account for 80% of the 8

7
8
7
increase in cotton mill use and their 6 6

combined share of global cotton consumption 5 5

is estimated at 57%.
96 6
97 7
98 8
99 9
00 0
01 1
02 2
03 3
04 4
05 5
06 6
07 7
08 8
09 9
10 0
11 1
2
/9
/9
/9
/9

/0
/0
/0
/0
/0
/0
/0
/0
/0
/0
/1
/1
/1
95

IMP/EXPORTS STOCKS
As global production and consumption are
pvwtr

expected to almost balance in 2010/11, world

 -2-

cotton stocks are expected to
unchanged at about 9.6 million tons.
The projected world cotton ending stocks of
9.6 million tons as at 31 July 2010, is 21%
down from the previous season and the
remain lowest level of stocks in 6 years. The global
stocks-to-use ratio of 39% for 2009/10 is
also the lowest ratio in 16 years. The ICAC
expects stocks to drop less sharply in China
than in the rest of the world due a large
increase in Chinese imports in 2009/10.

.
Estimated world supply and demand for
cotton for the 2009/10 season and
projections for 2010/11 and 2011/12 Cotton imports and stocks situation for China
(seasons beginning 1 August): (mainland):

(million metric tons) 2009/10 2010/11 2011/12 CHINA (mainland) IMPORTS AND STOCKS
5.5 5.5

Beginning stocks 12.1 9.6 9.6 5 5

IMPORTS - MILLION TONS

STOCKS - MILLION TONS

4.5 4.5
Production 22.0 25.0 25.9 4 4
3.5 3.5
Consumption 24.5 24.9 25.3 3 3
Exports 7.8 7.9 8.2 2.5 2.5
2 2
Imports 7.8 7.9 8.2 1.5 1.5

Ending stocks 9.6 9.6 10.2 1

0.5
1
0.5
Ending stocks/use 43% 44% 45% 0 0
(China excluded)
96 6
97 7
98 8
99 9
00 0
01 1
02 2
03 3
04 4
05 5
06 6
07 7
08 8
09 9
10 0
11 1
2
/9
/9
/9
/9
/0
/0
/0
/0
/0
/0
/0
/0
/0
/0
/1
/1
/1
95

A Index (US c/lb) 78 87 pvchi

IMPORTS STOCKS

Average Cotlook A index prices (an indicator of world

cotton lint prices) and corresponding South African “prices”:

A INDEX RSA "PRICE"

Avg: US c/lb Avg: SA c/kg
Last week (21/06 - 25/06/10) 90.76 1526.42
June 2010 91.50 1560.11
Today (01/07/10) (forward A index) 85.35 1465.84
May 2010 90.13 1534.54
A year ago 61.45 1061.50
Two years ago 80.15 1406.19

New York cotton futures as at 1 July 2010 New York JULY cotton futures as at
(settlement prices): the beginning of each week:
JULY FUTURES
NY FUTURES (WEEKLY)
US c/lb
95
90 JULY 12
futures
October 2010 79.10
85
80 JULY 09
JULY 11
December 76.45 75 futures
US cent/lb

futures
70 JULY 10
March 2011 77.73 65
60
futures

May 78.24 55
50
July 78.53 45
40
October 76.27
M EB
Y 9
A R 08

PR R 9

JU Y
OEP 07

MPR 08

JUNE 09
DOV 07

JUAY 08
J N 08

O P 8

O PT 09
N CT 09
DOV 08

D V 09

A R
MPR
JA 07

JAC 09
F 10
N T 07

M EB 08

JAC 008

JU A L 09

SEUG 09
N CT 08

A AB 09
F N 7

SEG 008

FEN 8

N 09

N
A LY 09
A UL 08
ES 0

MI 0

A
A
S G

December 74.52
C

O
A

E
U

M
A

axfut07x
 -3-

Local outlook

As far as the local outlook is concerned, the produced from RSA produced seed cotton,
6th estimate for the 2009/10 production year 16% down from the previous season. The
indicates a total crop of 38 842 lint bales, balance of 3 510 lint bales relates to Swazi-
14% down from the previous season and the land produced cotton to be ginned by the
smallest crop since the early sixties. About Swaziland gin.
35 332 lint bales are estimated to be

RSA COTTON LINT CONSUMPTION RSA COTTON LINT IMPORTS & EXPORTS
THOUSAND BALES (200kg) THOUSAND BALES (200kg)
25 30

25
20
20
15
15

10 10

5 5

0
0

Se ly
Se ly
Sely

Se ly

ay
Ju y
Ju y

Ju y
ay

Ju y

Ja No t
Ja No t

Ja No t

M0
08

09
M5

M6

M7
Se l
p

M r

M r
M r

M r
M r

M r

n v
n v
n v
n v

n v
Ju

p
p

a
a

a
a

1
a
a

a
0

0
Ja No

Ja No
Jan Feb Mrt Apr Mei Jun Jul Aug Sep Okt Nov Des

M
M
n
Ja

Frame, the largest cotton spinner

2010 2009 2008 2007 in SA, discontinued the spinning IMPORTS EXPORTS
pvverbr
of cotton as from July 2009 pvinuit

COTTON CROP REPORT - 6th ESTIMATE 2009/10 PRODUCTION YEAR 01/07/10

YIELD YIELD %
IRRIGATION DRYLAND PRODUCTION CROP % OF CROP
PRODUCTION HECTARES HECTARES kg seed kg seed 200 kg bales HAND GINNED
REGION IRRIGATION DRYLAND cotton/ha cotton/ha cotton lint PICKED SO FAR

LIMPOPO PROV.
Loskop 1009 0 3850 0 6798 10% 14%
North & South Flats 24 160 3100 800 354 10% 14%
Dwaalboom/Thabazimbi 50 0 4000 0 350 10% 14%
Weipe 740 0 3800 0 4500 0% 30%
NORTHERN CAPE
Vaalharts 1020 0 5000 0 9180 0% 11%
Lower Orange River 150 0 5000 0 1388 100% 80%
Rest of Northern Cape 630 0 6047 0 7033 0% 75%
NORTH WEST
Stella/Setlagoli 0 0 0 0 0 0% 0%
Taung 490 0 4800 0 4194 0% 11%
KWAZULU-NATAL 0 500 0 600 540 100% 0%
MPUMALANGA 0 900 0 622 995 100% 3%
EASTERN CAPE 0 0 0 0 0 0% 0%
RSA TOTAL 4113 1560 4615 633 35332 10% 29%
Swaziland* 0 3900 0 500 3510 100% 0%
Botswana* 0 0 0 0 0
Namibia* 0 0 0 0 0
Zimbabwe* 0 0 0 0 0
Mozambique* 0 0 0 0 0
GRAND TOTAL 4113 5460 4615 538 38842 18% 26%
* Particulars relate to expected purchases of seed cotton by RSA & Swaziland ginners from these countries.

ENQUIRIES: MR H J BRUWER (CHIEF EXECUTIVE OFFICER)

Posbus / P O Box 912232, Silverton, Pretoria, 0127
Katoen SA Gebou, Cycadoord 90, Uit Watermeyerstraat, Val de Grace X10
Cotton SA Building, 90 Cycad Place, Off Watermeyer Street, Val de Grace x10
Tel: 27 (12) 804 1462 - 7; Faks/Fax: 27 (12) 804 8616; E-mail: enquiries@cottonsa.org.za
Website: www.cottonsa.org.za