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Lahore
Tuesday, May 28, 2024

Cotton scenario this week

Cotton arrival in Pakistan was largely stagnant, increasing by 0.05 percent as of March 31, 2024, compared to February, 2024, according to data released by the Pakistan Cotton Ginner’s Association (PCGA).

The total cotton arrival in Pakistan rose to 8.397 million bales compared to 8.393 million bales recorded on February 29, 2024, an increase of 0.004 million bales. On a year-on-year basis, however, cotton arrival surged by almost 71 percent, when compared to 4.912 million bales registered on March 31, 2023.

The local cotton market remained dull throughout the week as spinners remained reluctant to buy the commodity as they found it unviable to produce yarn at current power and energy rates. The trading volumes therefore were negligible.Cotton rates remained uniform in both Sindh and Punjab ranging from Rs 20,000 to Rs 22,000 per maund. Phutti prices in Punjab were observed between Rs 9,500 and Rs 10,000 per 40 kg. The Spot Rate of cotton as indicated by Karachi Cotton Association remained stable at Rs 21,500 per maund, while Polyester Fiber was available at Rs 367 per kg.

According to the International Cotton Advisory Committee it is a bit early in the process to get overly excited, but if the initial ICAC forecast holds true, the 2024/25 season will be posting gains in area, production, consumption, and trade. The biggest wild card, as it has been for the last few years, is the weather.

Weather is also the reason for the one cotton area that is likely to show a decline: yields, which are expected to decrease 0.12% to 768 kg/ha. Global cotton yield has been dropping since the 2017/18 season, likely due to extreme weather caused by global climate change and pest pressures brought on by adverse weather conditions, also a result of global climate problems.

Area should post a 3 percent increase over 2023/24 at 32.85 million hectares. Production is showing an increase of just over 2.5 percent at 25.22 million tons. Consumption is forecasted to increase 2.9 percent to 25.37 million tons. Trade (imports and exports) is currently forecasted to increase nearly 4 percent over the 2023/24 cotton season to 9.94 million tons.

The Secretariat’s current price forecast of the season-average A-index for 2023/24 ranges from 85.67 cents to 100.62 cents, with a midpoint of 92.20 cents per pound.

Cotton prices differ by wide range in apparel producing countries and cotton producing countries. The countries that produce cotton and manufacture apparel and textile products enjoy a price advantage. The retail price range for Australian cotton is between US$ 4.14 and US$ 8.90 per kilogram or between US$ 1.88 and US$ 4.04 per pound(lb). The retail price range in Australian Dollar for cotton is between AUD 6.23 and AUD 13.38 per kilogram or between AUD 2.83 and AUD 6.07 per pound(lb) in Canberra and Melbourne.

The retail price range for New Zealand is between US$ 2.40 per kilogram or between US$ 0.86 and US$ 1.09 per pound(lb). The retail price range in New Zealand Dollar for cotton is between NZD 3.03 and NZD 3.81 per kilogram or between NZD 1.37 and NZD 1.73 per pound(lb) in Wellington and Auckland.

The retail price range for Indonesian cotton is between US$ 0.86 and US$ 1.14 per kilogram or between US$ 0.39 and US$ 0.52 per pound(lb). The retail price range in Rupiah for cotton is between IDR 14,308.50 and IDR 19,078.00 per kilogram or between IDR 6,489.12 and IDR 8,652.15 per pound(lb) in Jakarta and Surabaya. The retail price range for Vietnam cotton is between US$ 1.45 and US$ 2.42 per kilogram or between US$ 0.66 and US$ 1.10 per pound(lb). The retail price range in Dong for cotton is between VND 36,330.00 and VND 60,550.00 per kilogram or between VND 16,476.19 and VND 27,460.32 per pound(lb) in Hanoi and Ho Chi Minh City. The retail price range for Thailand cotton is between US$ 1.45 and US$ 3.38 per kilogram or between US$ 0.66 and US$ 1.53 per pound(lb). The retail price range in Baht for cotton is between THB 49.74 and THB 116.05 per kilogram or between THB 22.56 and THB 52.63 per pound(lb) in Bangkok and Chiand Mai.

The retail price range for Bangladesh cotton is between US$ 0.94 and US$ 1.66 per kilogram or between US$ 0.43 and US$ 0.75 per pound(lb). The retail price range in Taka for cotton is between BDT 101.48 and BDT 178.64 per kilogram or between BDT 46.02 and BDT 81.02 per pound(lb) in Dhaka and Chittagong (Chattogram). The retail price range for Myanmar cotton is between US$ 0.72 and US$ 2.17 per kilogram or between US$ 0.33 and US$ 0.98 per pound(lb). The retail price range in Kyat for cotton is between MMK 1,536.22 and MMK 4,608.67 per kilogram or between MMK 696.70 and MMK 2,090.10 per pound(lb) in Naypyitaw and Yangon. The retail price range for Cambodia cotton is between US$ 0.24 and US$ 0.43 per kilogram or between US$ 0.11 and US$ 0.19 per pound(lb). The retail price range in Riel for cotton is between KHR 993.23 and KHR 1,787.81 per kilogram or between KHR 450.44 and KHR 810.80 per pound(lb) in Phnom Penh and Siem Reap.

The retail price range for Spain cotton is between US$ 3.37 and US$ 4.33 per kilogram or between US$ 1.53 and US$ 1.97 per pound(lb). The retail price range in Euro for cotton is between EUR 3.11 and EUR 4.00 per kilogram or between EUR 1.41 and EUR 1.82 per pound(lb) in Madrid and Barcelona. The retail price range for Italian cotton is between US$ 8.71 and US$ 24.21 per kilogram or between US$ 3.95 and US$ 10.98 per pound(lb). The retail price range in Euro for cotton is between EUR 8.05 and EUR 22.37 per kilogram or between EUR 3.65 and EUR 10.14 per pound(lb) in Rome and Milan. The retail price range for Turkey cotton is between US$ 2.43 and US$ 3.65 per kilogram or between US$ 1.10 and US$ 1.66 per pound(lb). The retail price range in Turkish Lira for cotton is between TRY 48.21 and TRY 72.32 per kilogram or between TRY 21.86 and TRY 32.80 per pound(lb) in Ankara and Istanbul. The retail price range for Portugal cotton is between US$ 2.26 and US$ 5.72 per kilogram or between US$ 1.03 and US$ 2.60 per pound(lb). The retail price range in Euro for cotton is between EUR 2.09 and EUR 5.29 per kilogram or between EUR 0.95 and EUR 2.40 per pound(lb) in Lisbon and Porto.

The retail price range for South Africa cotton is between US$ 2.92 and US$ 3.89 per kilogram or between US$ 1.32 and US$ 1.76 per pound(lb). The retail price range in Rand for cotton is between ZAR 56.64 and ZAR 75.52 per kilogram or between ZAR 25.69 and ZAR 34.25 per pound(lb) in Johannesburg and Cape Town. The retail price range for Kazakhstan cotton is between US$ 0.77 and US$ 1.22 per kilogram or between US$ 0.35 and US$ 0.55 per pound(lb). The retail price range in Tenge for cotton is between KZT 346.29 and KZT 547.93 per kilogram or between KZT 157.05 and KZT 248.49 per pound(lb) in Nur-Sultan and Almaty.

The retail price range for Brazil cotton is between US$ 1.59 and US$ 1.68 per kilogram or between US$ 0.72 and US$ 0.76 per pound(lb). The retail price range in Brazilian Real for cotton is between BRL 7.95 and BRL 8.40 per kilogram or between BRL 3.61 and BRL 3.81 per pound(lb) in Brasilia and Rio de Janeiro. The retail price range for Mexico cotton is between US$ 1.54 and US$ 1.59 per kilogram or between US$ 0.70 and US$ 0.72 per pound(lb). The retail price range in Mexican Peso for cotton is between MXN 27.36 and MXN 28.23 per kilogram or between MXN 12.41 and MXN 12.80 per pound(lb) in Mexico City and Guadalajara.

.US cotton futures fell towards 82 per pound, their lowest in over seven weeks, amid subdued demand and expectations of higher supply. Competition from Brazilian and Australian cotton in the global market poses a challenge to US cotton, prompting China to shift its buying to these two countries. On the supply side, the U.S. The Department of Agriculture (USDA) raised its forecast for Australia’s cotton production in the current season by 200,000 bales to 5 million and said the country would produce 5.5 million bales in 2024/2025. The USDA’s March WASDE report indicated a 130,000 bales increase in global production for 2023-24.

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