Cotton: World Markets and Trade

    Cotton modules in front of cotton gin. ©Debra L Ferguson

    The United States exports roughly three-quarters of its cotton production; therefore, reliable data on shipments is the foundation for estimating and forecasting the U.S. cotton balance sheet. USDA estimates 2022/23 U.S. exports were 12.8 million 480-lb bales, the simple average of U.S. Census Bureau (herein referred to as Census)1 and USDA Export Sales Reporting (ESR) shipments (converted from running bales2 ).3 ESR shipments have been lower than Census for 11 consecutive years, and the difference between the two sources in 2022/23 was nearly 600,000 bales.

    Since 2017/18, USDA has computed the simple average of ESR and Census exports to arrive at the final U.S. cotton export estimate. Census shipments have exceeded ESR by nearly 5.0 million bales since that time. 4 Those discrepancies are likely due to three issues: differences in methodology, exporter franchising (inflating shipping weight in Census data), and reporting quality issues for both sources. For ESR, some exporters may not report or others may not report their total sales and shipments. For Census, there may be misreporting of product codes (e.g., incorrectly labeling cotton waste (Harmonized System (HS) heading 5202) as cotton lint (5201)).

    The largest discrepancies in 2022/23 have occurred for the following countries: Macao, Hong Kong, Vietnam, and Pakistan. ESR recorded zero exports for Macao and Hong Kong; Census exports to these markets were likely destined for Vietnam or China. This partially explains why ESR reported shipments to Vietnam were larger (by 375,000 bales) compared with Census.

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