Cotton prices in Pakistan increased by about 15 percent in the second week of January after increased demand moved up from an average of Rs1700 per 40 kg to Rs20000 per 40 kg. The prices remained steady thereafter though at some places quality cotton also fetched Rs21000 per 40 kg. The trading, however, remained subdued as mills are finding it hard to dispose of cotton yarn in all-cotton markets of the country.
Uncertainty at the global level also remained uncertain. Traders are waiting for better days. Cotlook has reported that a cautious optimism began to emerge in the industry during December, although it pointed out that the optimism was tempered somewhat by a rise in covid-19 cases in China and that “a transformation of market sentiment still appeared some way off”. The market would remain subdued till the operations in China normalize.
In December downstream textile demand remained below the level that would normally be expected for the month but a slightly more positive mood was in evidence after China relaxed covid-19 restrictions in late November. This led to what it called “a tentative improvement in raw cotton demand” in several countries. Vietnam was was a rare country that showed interest in buying cotton from the global cotton markets. The Vietnamese mills experienced “a modest uptick in demand for cotton yarn” ahead of the Lunar New Year celebration (which begin on January 22).
In 2023, the approximate price range for Egypt Cotton is between US$ 377.84 and US$ 5.77 per kilogram or between US$ 171.39 and US$ 2.62 per pound (lb). The price in Egyptian Pounds is EGP 5943.62 per kg. The average price for a ton is US$ 377835.73 in Alexandria and Cairo. In the current year, the approximate price range for Australia Cotton is between US$ 2 and US$ 2.01 per kilogram or between US$ 0.91 and US$ 0.91 per pound (lb). The price in Australian Dollars is AUD 2.58 per kg. The average price for a ton is US$ 1999.25 in Melbourne and Canberra.
The approximate price range for Brazil Cotton this year is between US$ 1.62 and US$ 1.71 per kilogram or between US$ 0.73 and US$ 0.78 per pound(lb). The price in Brazilian Real is BRL 8.88 per kg. The average price for a ton is US$ 1620.8 in Rio de Janeiro and Brasilia. As per the current market rates, the maximum price of Cotton is 9297.00 INR/Quintal in Bijapur whereas the minimum rate is 769.00 INR/Quintal in Kottur across varieties. The average price is 7881.00 INR/Quintal across varieties.
In the United States, unsold cotton stocks are a worry for traders. In January the cotton market was relatively quiet in anticipation of the various cotton-specific and macroeconomic reports that point to the lack of Index rebalancing action. March futures spent most of the week having wide trading ranges, but still making gains, before outside market news and a bearish WASDE report weighed prices down. After falling under strong pressure, March futures finished the week ending January 12 at 82.04 cents per pound, down only 54 points from the week prior. Total open interest rose to 202,477, an increase of 3,848 contracts compared to last week.
While export sales improved, they were still disappointing for the week ending January 5. For the current marketing year, net sales of 72,600 Upland bales were booked for the week, which is below average for what is typically reported at this point in the marketing year, but up from what has been reported in previous weeks. The biggest buyers were Turkey with 19,600 Upland bales, China with 16,400, Vietnam with 11,800, and Pakistan with 9,200. There were no new sales reported for the 2023/24 marketing year, but shipments looked better for the week. A total of 150,500 Upland bales were shipped, which is below the pace needed for the current USDA estimate, but above what has been exported recently. A total of 3,300 Pima bales were booked for 2022/23 and 6,300 bales were exported.
The World Agricultural Supply and Demand Estimates (WASDE) came somewhat as a surprise for traders, in particular, the rise in U.S. production was not anticipated. Expected production was increased to 14.68 million bales, which left many wondering where the crop is going to come from now that ginning and classing are wrapping up across the country. In India, the market is depicting similar trends. The domestic uptake of cotton is slow and export orders are elusive.
