November 30, 2002	Saturday	Ramazan 24, 1423

NEW YORK, Nov 29: US cotton exports appear to be picking up, but some analysts said on Friday prices may need to decline sharply in the coming weeks for sales to spike higher and hit the USDA target for the current season.

USDA, in its weekly export sales report, said net upland cotton sales hit 175,300 running bales (RBs, 500-lbs), slightly above trade belief it would range from 150,000-170,000 RBs.

In its monthly supply/demand report, USDA forecast US cotton exports in the 2002/03 marketing year (July/August) at 10.8 million (480-lb) bales, from 11 million last month.

“I’m afraid the way to generate more business is to take prices down,” Keith Brown, president of commodity trading firm Keith Brown and Co. in Moultrie, Georgia, told Reuters in a phone interview.

Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida said sales were good on the whole and it was “encouraging to see China there.”

China has been the leading buyer of American cotton the past four weeks, with total sales of 267,500 RBs.

The USDA monthly production report in November projected Chinese cotton imports in 2002/03 at 2.0 million (480-lb) bales.

Several analysts said that, while the pick-up in sales should be encouraging for the cotton futures market, the pace of US cotton exports still lags badly behind what is needed for American exporters to hit the USDA target.

Brown said sales and shipments would need to exceed 200,000 RBs over the next few weeks to revive the chance of US exporters reaching the 10.8 million bales figure. The weekly sales data showed shipments at 145,000 RBs.

“China is the only one buying and that’s about it,” said Alan Feild of iamhedged.com.

A renewed round of Step 2 marketing incentives should also help US cotton exporters make up some of the ground on sales. Step 2 is a marketing programme administered by Washington to help spur U.S. cotton sales.

“Step 2 should help. The more the incentive, the more it should (generate sales),” said Brown.