In Pakistan, the cotton market remained steady on June 01 while the trading volume was higher and satisfactory. New crops have started arriving from Sindh mainly.
The rate of new crops of cotton in Sindh and Punjab was quoted at Rs 20,000 per 37.324 kg. The rate of Phutti in Sindh and Punjab is in between Rs 9,000 to Rs 9,200 per 37.324 kg.
600 bales of Sanghar were sold at Rs 20,000 to Rs 20,300 per 37.324 kg, 200 bales of Tando Adam were sold at Rs 20,000 per 37.324 kg, 200 bales of Hyderabad were sold at Rs 20,100 per 37.324 kg and 100 bales of Burewala were sold at Rs 20,000 per 37.324 kg. The Spot Rate remained unchanged at Rs 20,000 per 37.324 kg. Polyester Fiber was available at Rs 365 per kg.
The recently concluded cotton campaign in Punjab has resulted in the sowing of over 4.4 million acres of land, a significant increase in the figures of 3.67 million acres from the previous year. This campaign is projected to yield 7.35 million bales of cotton, representing a substantial 143 percent increase compared to the corresponding year’s production of 3.03 million bales. Amid expectations that cotton acreage in the upcoming kharif season is likely to exceed the previous year’s tally, the Bt cottonseed market is witnessing a tight supply of branded hybrids, mainly in the central and south zones, as seed production was impacted last year due to excess rains, vendors said.
Patron-in-Chief of APTMA, Dr. Gohar Ejaz, appreciates PM Shehbaz Sharif and Government of Punjab for their vision and commitment to the welfare of the farmers and the textile sector – instrumental in encouraging and assisting cotton farmers during the campaign by providing an intervention price of Rs 8500/mounds, timely crop advisories, and necessary inputs that have set the path for a sustainable future for Pakistan’s a textile and agricultural sector.
In India, the unseasonal rains in April and May this year have triggered early planting of cotton in key producing States of Gujarat and Maharashtra, while the planting in the Northern region continues.
During the current cotton season to September, cotton arrivals as of March 31 were 60 percent lower. The Southern India Mills Association (SIMA), the apex body of spinning mills in South India, has asked farmers to dispose of cotton stocks held back by them before the monsoon begins to fetch better prices. “It will be difficult to gin cotton during the rainy season,” said Ravi Sam, SIMA Chairman. Besides, the quality of cotton might deteriorate during the rainy season and get lower prices. However, he said cotton prices are expected to prevail at current rates until June-end.
According to the monthly press brief of ICAC, there has been little movement in the global cotton market recently, with projections for production coming in at 24.51 million tonnes and consumption expectations remaining unchanged from last month at 23.79 million tonnes. It would seem that the lull will likely continue for another month or two at most because that’s when farmers need to decide what they’re going to plant for the year.
Even trade — while considerably lower than it was at this point last year — remains largely unchanged since ICAC reported on it in May. Trade data indeed lags real time by several months due to the need to compile and assess the global numbers, but there are few indications that there will be significant changes to trade before the season ends on 31 July 2023.
This month’s CTM also takes a long look at the history of cotton in West Texas, the heart of the US cotton industry. The same approach was taken with India in the April 2023 CTM. The Secretariat’s current price forecast of the season-average A index for 2022/23 ranges from 96.36 cents to 106.47 cents, with a midpoint of 100.78 cents per pound.
In the United States, the export sales remained unchanged from the prior week. Southwest received much-needed rain with more on the way. In a reversal from last week, cotton futures fell under substantial pressure and erased the gains made over the past two weeks. Uncertainty about the U.S. debt ceiling, rains in the Southwest, and lower demand gave the market reason to change directions. Additional worries about another Covid outbreak in China weighed on the market towards the end of the week. For the week ending May 25, July futures settled at 80.12 cents per pound, down 654 points for the week. December futures settled at 78.50 cents per pound, down 522 points for the week. Daily trading volumes increased compared to last week, and traders were able to add 7,012 contracts to their positions, bringing total open interest to 192,480.
U.S. stocks were mostly mixed this week, reacting to news of debt ceiling concerns and strong economic data. The U.S. is edging closer to defaulting on its debt and tensions have been high as negotiators attempt to find a resolution. Outside markets were quiet most of the week, but a slew of economic data was released on Thursday. Major indexes finished the week up, with the NASDAQ climbing to a 13-month high after tech stocks reported high earnings. First quarter U.S. Gross Domestic Product (GDP) was revised upward to 1.3 percent quarter over quarter, up from the 1.1 percent increase initially released. U.S. initial jobless claims rose 4,000 to 229,000, which was below. expectations of 245,000. Additionally, hawkish comments from the Fed have many traders concerned that more interest rate hikes could occur. The U.S. Dollar reached a 2-month high, gaining ground from the surprisingly good economic data. Crude oil fell sharply on the news that OPEC will maintain its current production target.
For the week, the U.S. Export Sales Report showed sales that were unchanged from the week prior. A net total of 131,200 Upland bales were sold for the current crop year. Once again, the biggest buyer for the week was China, with 64,800 bales purchased. Vietnam followed, with 30,400 bales purchased, then Turkey with 11,700 bales, Bangladesh with 9,000 bales, and Pakistan with 3,800 bales. As the focus is starting to shift to the 2023/24 crop year, sales of new crops will become increasingly more important. A net total of 84,300 bales of new crops were sold for the week. Upland shipments were lower this week, with a total of 268,700 bales exported. Although shipments were weaker compared to what has been recently reported, the pace is still above what is needed to meet the USDA export expectation of 12.6 million bales. Pima net sales were also weaker, with a total of 3,300 bales sold and 13,500 bales shipped.
The Southwest has received light to moderate moisture throughout the past 10 days, with hail and strong winds also reported in some areas. The rain has improved topsoil and subsoil moisture throughout many areas in Texas, Oklahoma, and Kansas. As planting progresses, sunshine and warm temperatures will be needed along with timely rains to ensure a healthy crop. More storms and rain are forecast for the coming week, which could delay planting in the areas of West Texas, Oklahoma, and Kansas. South Texas received light rains early this week, but open skies and warmer temperatures were finally present. The dry, warm weather is forecast to continue into next week, helping crop development in the area. According to the Crop Progress Report, 45 percent of the expected U.S. cotton crop has been planted, which is five percentage points below the average. Texas is slightly behind on planting, with 35 percent of the crop planted compared to the 5-year average of 43 percent. Kansas and Oklahoma are progressing at a normal rate, with 40 percent and 27 percent of the expected crop planted, respectively.
All you need to know about cotton this week
