Bulls dominated Pakistan’s cotton market at the start of February and trading also remained satisfactory. Karachi Cotton Association (KCA) on Wednesday increased the spot rate by Rs1000 per 37.5 kg and closed it at Rs22000 per 37.5 kg.
Cotton market experts informed TEXtalks that the cotton rates in Sindh ranged between Rs19000 to Rs23000 per 37.5 kg. The rate of cotton in Punjab was between Rs19500 to Rs22000 per 37.5 kg. The rate of Phutti in Sindh varied from Rs6500 to Rs8500 per 40 kg. The rate of Phutti in Punjab was higher between Rs7500 to Rs10500 per 40 kg.
Buyers were active in the market as 1200 bales of Dherki were sold at Rs22000 per 37.5 kg, 800 bales of Dadu were sold at Rs21550 to Rs22000 per 37.5 kg, 200 bales of Karundi were sold at Rs20900 per 37.5 kg, 3124 bales of Hyderabad were sold at Rs23000 per 37.5 kg, 2400 bales of Rahim Yar Khan were sold at Rs22000 per 37.5 kg, 400 bales of DG Khan, 400 bales of Mian Wali, 200 bales of Khan Pur were sold at Rs21,000 per 37.5 kg, 400 bales of Lodhran, 200 bales of Faqeer Wali, 400 bales of Haroonabad, 200 bales of Hasil Pur and 200 bales of Vehari were sold at Rs20000 per 37.5 kg.
International cotton prices, as measured by the Cotlook A Index, moved either side of the dollar mark in January. The Index’s low point of 97.6 US cents per lb was recorded on January 5, while a high point (102.45) was reached almost three weeks later. The price ended January on a weaker note, to close just 40 cent points above its opening level.
After months of disappointing reports, it has been a relief for the US cotton traders that export sales have increased noticeably in the past two weeks. For the week ending January 26, net sales of 213,700 Upland bales were reported for the 2022/23 year and 6,100 bales for the 2023/24 marketing year. The increases came from China, who booked 59,200 bales, Turkey with 55,200 bales, Vietnam with 42,400 bales, and Pakistan with 22,000 bales. The sales are spread throughout many countries, showing a good range and a hopeful recovery in demand. Shipments of 175,800 bales were reported for the week, which is below the pace needed to reach the USDA estimate of 12 million bales. Pima sales were also up for the week with 5,400 bales getting booked for the current crop year and 2,100 bales getting shipped for the week.
That optimism was consolidated somewhat by the United States’ export sales reports released in the second half of January, which represented the greatest weekly increases in the season so far. The aggregate addition to the upland sales figure during the two-week period in question was over 420,000 running bales, over half of which were destined to China. The total (upland and Pima) commitment stood by the end of January at around 9.4 million bales, equivalent to roughly 80 percent of USDA’s forecast for the season (reduced to 12 million statistical bales in the latest WASDE report).
In those markets experiencing a shortage of US dollars, most notably Pakistan and Bangladesh, the execution of import contracts remained a source of frustration to both mill buyers and trade sellers. Energy supplies were also a worry, particularly in the latter country, where a government announcement confirmed a further rise in the cost of gas from February 1 that was met with dismay from the cotton and textiles industry. The volume of business concluded on the Indian subcontinent was therefore limited.
In Egypt, too, the need to generate dollars prompted some aggressive reductions in export offers, in the face of poor demand from the customary destinations. Cotlook’s Giza 94 quotation was reduced substantially as reports surfaced of business considerably below the levels previously in force.
Nevertheless, some spinners in the Far East showed a greater willingness to make purchasing decisions ahead of the Lunar New Year holiday (beginning January 22), ostensibly to ensure the continuity of their supply following return from the break at the end of the month, as well as in response to a tentative broadening of demand for cotton yarn that many hoped would continue to show improvement in February and beyond.
Meanwhile a modest revival of demand from Chinese buyers, who had earlier been virtually absent from the international market, engendered further optimism in international trade circles. Reports surfaced that importers in the country were showing interest in overseas origins to a greater degree than had been witnessed for some time.
In the United States March futures traded sideways for the week after rallying from last week’s increased Export Sales Report. The rally also helped with China coming back to the market. The rest of the trading week was fairly unchanged due to the Lunar New Year holiday in Southeast Asia and lack of fundamental drivers able to take hold. After a positive Export Sales Report on Thursday, March futures rose to 88.88, the highest level seen in over a month before reversing to finish in the upper end of the trading range that has been present this week. For the week ending January 26, March futures finished at 87.50 cents per pound, up 411 points for the week. Open interest continued its rise and increased 7,014 contracts to a total of 209,373.
Cotton research is now concentrated on sustainability. In Canada researchers have developed three cotton varieties that are fire resistant. This will eliminate the need to use fire retardant chemicals in the textile products to prevent them from fire. Sustainable cotton initiatives have been launched in numerous countries by over a dozen NGOs with the support of leading fashion brands.
