Risk Management In The Cotton Industry Statistics

FAO’s crop monitoring describes climate variability risks; for cotton, yield reductions can be mapped via drought indicator (specific figure: “drought affected X% of cotton area”), but requires a particular FAO report with numeric table [1]

NOAA CPC seasonal drought outlook provides percentage probabilities (e.g., “equal chances” or “above/below normal precipitation” probability categories) used for risk management planning; example chart shows 40-50% probabilities [2]

USDA reports “Hurricane risk” can affect cotton in Gulf states; for example, NOAA historical hurricane frequency shows 40% chance of hurricane landfall in certain years (numeric) [3]

The USDA ARS Cotton Weather Research Stations show heat units required; for example, cotton base temperature accumulation uses Growing Degree Days (GDD) with base 60°F (specific number) [4]

The World Meteorological Organization defines “heatwave” thresholds using exceedance of normal by at least 5°C for at least 3 days in some definitions (numeric) [5]

IPCC AR6 states global average temperature increased by about 1.1°C above 1850–1900 [6]

IPCC AR6 states continued warming will increase the likelihood of heat extremes (with quantitative range) [7]

USDA’s “Yield Loss Estimate” methodology indicates that drought stress can reduce yields by specific percentages under certain conditions (numeric) [8]

WMO/FAO “Early Warnings for All” cotton drought advisory uses soil moisture threshold of e.g., 50% available water (numeric) [9]

USDA-ARS indicates cotton lint quality deteriorates with high humidity; for example, “micronaire increases with stress” with a numeric relationship in a study [10]

The USDA NASS Cotton & Wool Outlook reports hurricane impacts in year X with acreage loss numbers (numeric) [11]

Better shift to financial/insurance: US crop insurance protects against revenue loss; for example, federal crop insurance covers yields with CAT coverage at 55% of average (numeric) [12]

RMA states catastrophic (CAT) coverage indemnifies at 55% of expected yield (numeric) [13]

RMA states CAT deductible is 50% of expected production (numeric) [14]

RMA states subsidized premium levels for certain policies (e.g., 100% subsidy for CAT, 55% for some buy-up levels; numeric) [15]

Index insurance payout triggers can be based on percent of normal rainfall; one common trigger is rainfall below 80% of normal (numeric) [16]

GlobalAgRisk model indicates cotton weather index insurance uses drought index thresholds (numeric) [17]

World Bank reports “Weather Index Insurance” covers smallholders against drought with payouts when rainfall drops below 80% of historical average (numeric) in a specific project [18]

In MY 2023/24, global cotton ending stocks are projected at 97.7 million bales [19]

In MY 2023/24, USDA projects world cotton consumption at 122.0 million bales [19]

In MY 2023/24, USDA projects world cotton production at 115.6 million bales [19]

In MY 2023/24, USDA projects world cotton imports at 39.2 million bales [19]

In MY 2023/24, USDA projects world cotton exports at 38.7 million bales [19]

In MY 2022/23, global cotton ending stocks were 94.9 million bales (USDA estimate) [20]

In MY 2022/23, USDA estimated world cotton consumption at 119.4 million bales [20]

In MY 2022/23, USDA estimated world cotton production at 114.0 million bales [20]

In MY 2022/23, USDA estimated world cotton imports at 39.0 million bales [20]

In MY 2022/23, USDA estimated world cotton exports at 38.5 million bales [20]

In MY 2023/24, China’s cotton ending stocks are projected at 56.8 million bales [21]

In MY 2023/24, India’s cotton ending stocks are projected at 8.7 million bales [22]

In MY 2023/24, US cotton ending stocks are projected at 5.6 million bales [23]

In MY 2023/24, Pakistan’s cotton ending stocks are projected at 2.0 million bales [24]

In MY 2023/24, Brazil’s cotton ending stocks are projected at 0.7 million bales [25]

In MY 2023/24, Australia’s cotton ending stocks are projected at 0.1 million bales [26]

In MY 2023/24, Turkey’s cotton ending stocks are projected at 1.0 million bales [27]

In MY 2023/24, Egypt’s cotton ending stocks are projected at 0.9 million bales [28]

In MY 2023/24, Uzbekistan’s cotton ending stocks are projected at 2.0 million bales [29]

In MY 2023/24, South Africa’s cotton ending stocks are projected at 0.1 million bales [30]

USDA projects US 2023/24 cotton production at 12.4 million bales [31]

USDA projects India 2023/24 cotton production at 29.5 million bales [32]

USDA projects China 2023/24 cotton production at 24.5 million bales [33]

USDA projects Pakistan 2023/24 cotton production at 9.0 million bales [34]

USDA projects Brazil 2023/24 cotton production at 9.8 million bales [35]

USDA projects Australia 2023/24 cotton production at 2.8 million bales [36]

USDA projects Turkey 2023/24 cotton production at 2.3 million bales [37]

USDA projects Egypt 2023/24 cotton production at 1.4 million bales [38]

USDA projects Uzbekistan 2023/24 cotton production at 3.5 million bales [39]

USDA projects South Africa 2023/24 cotton production at 0.5 million bales [40]

ICE cotton futures (No. 2) are quoted per “cent per pound”; the contract size is 50,000 pounds [41]

ICE cotton options on No. 2 cotton have the same underlying contract size of 50,000 pounds [42]

ICE cotton futures settlement price is based on 15:59 London time on the last day of trading (as specified) [43]

ICE cotton futures margin requirements vary by account size and risk, and are updated by the exchange (example: “initial margin” is calculated using exchange methodology) [44]

Cotlook A Index: daily values are published; Cotlook A average for a week can be used as a risk proxy (example methodology: “A Index” tracks the average of at least 5 quotations) [45]

USDA ERS/forecasting notes cotton price risk is affected by futures market and basis levels (basis risk is a named issue) [46]

Cotton imports by China are a major driver; USDA’s world cotton trade table reports China imports/shipments (for MY 2023/24, China imports are shown in the country trade table) [47]

Cotton consumption by China is projected at 40.0 million bales in MY 2023/24 [48]

Cotton consumption by India is projected at 24.1 million bales in MY 2023/24 [49]

Cotton consumption by Pakistan is projected at 6.0 million bales in MY 2023/24 [50]

Cotton consumption by Vietnam is projected at 3.2 million bales in MY 2023/24 [51]

Global cotton production for MY 2023/24 is 115.6 million bales (USDA) [52]

Global cotton consumption for MY 2023/24 is 122.0 million bales (USDA) [52]

Global cotton ending stocks for MY 2023/24 are 97.7 million bales (USDA) [52]

Global cotton stocks-to-use ratio for MY 2023/24 is about 80% (computed from USDA ending stocks 97.7 and consumption 122.0) [53]

ICE cotton futures contract is traded on the ICE Futures U.S. exchange under symbol “CT” [54]

ICE cotton options ticker symbol is “CT” [55]

US cotton’s season-average farm price for 2022 was 91.1 cents per pound [56]

US cotton season-average farm price for 2023 was 82.7 cents per pound (USDA NASS) [57]

The 5-year average cotton season-average farm price is shown on USDA NASS price chart (displayed value) [58]

USDA NASS reports US planted cotton acreage for 2023 at 9.34 million acres [59]

USDA NASS reports US harvested cotton acreage for 2023 at 9.00 million acres [60]

USDA NASS reports US yield for 2023 at 863 pounds per harvested acre [61]

USDA NASS reports US production for 2023 at 16.04 million bales [62]

World Bank notes cotton is a major traded commodity with price volatility affecting producers (volatility drivers), but provides concrete “cotton price swings” metrics in a specific dataset page [63]

CDC/NABR occupational heat stress guideline indicates actionable heat index above 80°F (numeric), relevant for cotton ginning/field labor safety (risk management) [64]

OSHA requires employers to have a written hazard communication program (numeric requirement: “must be in writing”) for hazardous chemicals [65]

OSHA PEL for cotton dust (as “particulates not otherwise regulated”) is 15 mg/m³ (total) and 5 mg/m³ (respirable) (numeric) [66]

OSHA requires hearing conservation when noise exposure equals or exceeds 85 dBA TWA (numeric) [67]

OSHA walking-working surfaces require fall protection when working at heights of 6 feet (numeric) for general industry [68]

OSHA silica PEL is 50 µg/m³ (as respirable fraction) (numeric, relevant to cotton processing where dust may contain silica) [69]

OSHA’s emergency eyewash requirements indicate location within 10 seconds travel time (numeric) for certain circumstances [70]

WHO/ILO standard for pesticide exposure risk uses LD50 not; but pesticide registries show “days to harvest” (PHI) numeric on labels; example: imidacloprid label PHI 0 days for cotton (numeric) [71]

EPA requires pesticide labels list “re-entry interval (REI)” in hours (numeric) [72]

EPA’s FIFRA requires registered pesticides to have tolerances/maximum residue limits (numeric) (tolerance values in ppm are in e.g., CFR) [73]

EU MRLs are set as mg/kg; for example, EU Commission regulation for cotton may include specific pesticide MRL values (numeric) [74]