The continued currency devaluations in Southeast Asia and the associated financial disruptions in those countries have reduced prospects for consumption and imports of cotton in Thailand, Indonesia, Malaysia, and the Philippines in 1997/98. However, the forecasts for Southeast Asia's 1997/98 cotton consumption have been revised downward only 2 percent this month because of upward revisions to the data before 1997/98. In some cases, 1996/97 imports and consumption have been revised upward this month as official trade data has become available to USDA analysts in Washington. These upward revisions for 1996/97 have in turn suggested that Southeast Asia entered the 1997/98 marketing year with a higher capacity utilization than USDA had previously believed. This reassessment has partially offset the negative forecast adjustments in USDA's November estimates when compared with last month. However, USDA has revised downward its forecasted annual growth rates for cotton consumption, imports, and stocks inSoutheast Asia for 1997/98 relative to 1996/97. In October, the region's consumption and imports were expected to rise 3 percent from previous year levels, but USDA now forecasts a 2 percent decline in consumption and a 7 percent decline in imports. Thelargest 1996/97 revisions were made in Thailand, which has also undergone the largest currency devaluation and the largest reduction in expected Gross Domestic Product for 1997 and 1998. USDA's 1997/98 November forecast for Thailand's cotton consumptionwas reduced 9 percent from October and nearly 30 percent from the previous year. In October, the USDA forecast reflected a reduction if only 4 percent from the previous year. There were no revisions in Indonesia's 1996/97 estimates, so the 7 percent reduction in forecast cotton consumption in 1997/98 fully reflects USDA's current assessment of the impact of devaluation and financial disruption for Indonesia. Indonesia's imports were revised down 9 percent. Indonesia has traditionally had one of the lowest ratios of stocks to use in the world, constraining its ability to defer importing by consuming from stocks. The November forecast reflects consumption and import increases for 1996/97 for both Malaysia and the Philippines. Estimates for 1997/98 were raised consistent with the adjustment in 1996/97 but the revised forecasts now reflect negative, rather than positive annual growth.
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