SAN ANTONIO, TX (B)--Influential cotton merchant William Dunavant Jr., chairman and CEO of Memphis, TN-based Dunavant Enterprises, Jan. 5 forecast a drop in world cotton ending stocks in the 2000-01 marketing year, based on falling production and an increase in usage.

Dunavant was speaking at the Beltwide Cotton Conference.

From a projected 37.3 million bales in 1999-2000, Dunavant forecast stocks to fall to 32.5 million in 2000-01. The world crop was pegged by Dunavant at just over 85 million bales, compared with his forecast for the current year of 86.3 million.

USDA has not issued forecasts so far for the 2000-01 cotton marketing year, but is carrying a world crop for 1999-2000 of 87.38 million bales.

New York Cotton Exchange cotton futures rallied through midsession Jan. 5 on hopes that Dunavant might outline a bullish scenario in his keenly awaited speech.

Still, the outlook painted for the U.S. cotton market was not as supportive as the world scenario.

Dunavant called for U.S. cotton mill use in 1999-2000 to be slightly below USDA's current estimate of 10.2 million bales, while pegging exports slightly above USDA's 6.2 million.

Despite low prices, U.S. cotton plantings were forecast to increase thisspring, to 14.9 million acres from 14.6 million in 1999-2000.

The resultant crop of 18.6 million bales, assuming average yields, coupled with higher exports but flat domestic usage, will see U.S. cotton carryout rise by about 500,000 in 2000-01, Dunavant forecast.

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