Your experienced and reliable partner in cotton trading

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Committed to cotton since 1788
Your experienced and reliable partner in cotton
trading
www.reinhart.com
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The Organization
Paul Reinhart AG Winterthur, Switzerland
Subsidiaries Representations
Agents

• Selling
• W. Europe
• C. E. Europe
• S. Asia
• Far East
• North Africa
• USA
• Mexico
• Central America
• South America

• Buying
• Spain
• Turkey
• Middle East
• India
• Pakistan
• Egypt
• East Africa
• West Africa
• USA
• Mexico
• S. America

• Paul Reinhart Inc
• Dallas, Texas
• Fresno,
• California
• Harlingen,
• Texas
• Toowoomba,
• Australia
• Riverbend
• Warehouse

• Ginning
• Operations
• Fresno,
• California
• Bouake,
• Ivory Coast
• (Minority)
• Bamunanika,
• Uganda

• Buying
• Tashkent,
• Uzbekistan
• Ashgabat,
• Turkmenistan
• Dushanbe,
• Tajikistan
• Riga, Latvia
• Llyichevak,
• Ukraine
• Athens, Greece
• Jebel Ali,UAE
• Beijing/Shanghai,
• PRC
• Alexandria,
• Egypt
• Khartoum,
• Sudan

• Selling
• Bremen,
• Germany
• La Havre,
• France
• Porto,
• Portugal
• Athens,
• Greece
• Milan,
• Italy
• Moscow,
• Russia
• C. E. Europe
• Beijing/Shanghai,
• PRC

www.reinhart.com
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ORGANIC COTTON, A NECESSARY INVESTMENT FOR THE
FUTURE

• As a company, Paul Reinhart is committed to
  organic cotton. We have assigned a senior
  trader, in both of our main offices in
  Switzerland and in the US, to the development of
  this market. We intend to increase our
  participation in this market everywhere in the
  world. We consider this a necessary investment
  for the future. It is our goal to establish
  ourselves as the leading trader for organic
  cotton, in order to be ready for the time when
  organic cotton will no longer be a small niche
  product, but a major factor in world cotton
  trade. We are sure this will happen before the
  end of this decade.
• -Jurg Reinhart

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INFORMATION TOOLS FOR PRICE FORECASTING
New York cotton futures
Level of certificated stocks
Positions of speculators at the NYBOT
Cotlook Indices (A and B)
Over the counter (O-T-C) swaps trading in London
and at The SEAM
Basis
Production cost
U.S. loan level
Subsidies paid to producers and exporters
Minimum export prices fixed by producing
countries
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INFORMATION TOOLS FOR PRICE FORECASTING
Planting intentions for new crop
Crop progress
Supply/Demand statistics and expectations
Mill coverage
Weather reports
Market information on cotton trading around the
world (China!)
Technical analysis, including chart patterns
Currency developments
Crude oil prices
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Cotton Production, Consumption, Exports
Imports 2000/01 to 2002/03 - 3 year average
(USDA) (in million bales of 480 lbs.)
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Weekly High, Low, Friday close Nearest NYK
Futures contract
Oct 2, 2002 to Oct20, 2003
100.0 MILLION ?
98.0 MILLION
94.5 MILLION Est
87.5 MILLION
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Daily High, Low, Close Nearest NYK Futures
contract
2003
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FACTORS THAT COULD INFLUENCE COTTON PRICES IN
FUTURE
SHORT-TERM
BULLISH
Cotton is in tight supply with World Ending
Stocks estimated at 33.7 million bales or a
little over 4 months consumption for the 03/04
crop year
For nearby deliveries there are no large
quantities of cotton available except from the
U.S.
China continues to buy imported growths
aggressively
A weak U.S. dollar vs. the Euro and other Asian
currencies supports higher cotton prices which
are dollar-denominated
Farmers in the U.S. have priced about 60 of
their crop
Mills are not covered and still need to buy
and/or fix
Problems with crops in China, Uzbekistan and
Pakistan could lead to a smaller supply than
anticipated
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FACTORS THAT COULD INFLUENCE COTTON PRICES IN
FUTURE
SHORT-TERM
BEARISH
Yarn prices have not improved enough to support
higher cotton prices
US crop is being harvested in ideal conditions
Certificated stock is growing
China's own crop will soon become available
limiting the need for imports
The U.S. will likely produce a high grade crop
which will be more difficult to export
Possible loss of the Step 2 export marketing
certificate for U.S. cotton
Speculators are 43.5 net long
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FACTORS THAT COULD INFLUENCE COTTON PRICES IN
FUTURE
LONG-TERM
BULLISH
Improving world economy particularly in US, China
and Russia
China's pipeline will not likely be replenished
to sufficient levels any time soon
U.S. Dollar continues to be weak
BEARISH
Higher cotton prices will lead to more production
for the next crop year (cotton prices currently
would net a producer the highest returns vs.
other competing crops)
Higher prices will allow polyester to gain market
share
US ending stocks could be higher than anticipated
with a possible larger crop, less domestic
consumption and lower exports if cotton prices
continue to be strong