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Wednesday, June 19, 2024

Cotton scenario this week

Today Cotton phutti rate in Pakistan starts from 8,000 Rs to 10,400 Rs Per 40 Kg. the ginned Cotton price is 230 Rs Per Kg approximately or Rs 2340 per 40 kg. Cotton rates in every city are different. The current cotton rate in Pakistan is an important factor for both the agricultural and textile industries. As one of the largest producers of cotton in the world, Pakistan’s cotton rate has a significant impact on the economy and various sectors that rely on this commodity.

The cotton rate in Pakistan ( Phutti Rate in Pakistan) is determined by several factors, including global demand, supply and demand dynamics within the country, weather conditions, government policies, and international market trends.

Sowing for new crop in Punjab is in full swing. The provincial government has warned that each field officer would be held responsible if the sowing area target set by the Punjab government is not met.

This week we are updating the cotton prices prevailing in leading cotton producing countries only.

The premium for Australian cotton depends on the product category and what the customer is currently using. The key point for Supply Chain Managers and Buyers to remember is that a 5-10 percent premium for the raw material should most often be diluted down to a negligible premium once at garment or finished product stage.

It’s all relative. If the customer is high end and using SJV or Pima they will be looking at a discount for Australian cotton. If they’re a lower end spinner, they may pay anything from a 5-10 percent premium for the raw material when compared with standard American cotton, 10-20 percent compared to Brazilian for example.

Australian cotton prices have eased with the harvest in full swing, now quoted around $610 per bale, while US cotton futures are at a three year low. $648.5/bale (Cotlook ‘A’ Index) Down -0.6 percent.

In India cotton candy prices saw a modest increase of 0.18 percent to settle at 56,080, buoyed by strong demand for Indian cotton from countries like Bangladesh and Vietnam. However, the upside was capped by sluggish milling demand amid muted global demand for yarn. Additionally, prospects of a better crop in countries such as Australia added pressure to prices. Meanwhile, in India, cotton stocks are expected to plummet by nearly 31 percent in 2023/24, reaching their lowest level in over three decades, due to lower production and rising consumption.

In Mali the retail price range in CFA Franc BCEAO for cotton is between XOF 474.24 and XOF 948.49 per kilogram or between XOF 215.08 and XOF 430.15 per pound(lb) in Bamako and Sikasso.

The retail price range for Brazil cotton is between US$ 1.57 and US$ 1.65 per kilogram or between US$ 0.71 and US$ 0.75 per pound(lb). The retail price range in Brazilian Real for cotton is between BRL 7.83 and BRL 8.27 per kilogram or between BRL 3.55 and BRL 3.75 per pound(lb) in Brasilia and Rio de Janeiro.

The retail price range in Egyptian Pound for cotton is between EGP 148.73 and EGP 178.48 per kilogram or between EGP 67.45 and EGP 80.94 per pound(lb) in Cairo and Alexandria.

The retail price range in Tenge for cotton is between KZT 342.50 and KZT 541.93 per kilogram or between KZT 155.33 and KZT 245.77 per pound(lb) in Nur-Sultan and Almaty. The retail price range for Kazakhstan cotton is between US$ 0.76 and US$ 1.21 per kilogram or between US$ 0.35 and US$ 0.55 per pound(lb).

The retail price range for Uzbekistan cotton is between US$ 0.48 and US$ 0.86 per kilogram or between US$ 0.22 and US$ 0.39 per pound(lb). The retail price range in Uzbekistan Sum for cotton is between UZS 5,993.13 and UZS 10,787.63 per kilogram or between UZS 2,717.97 and UZS 4,892.35 per pound(lb) in Tashkent and Samarkand.

The retail price range for Portugal cotton is between US$ 2.23 and US$ 5.65 per kilogram or between US$ 1.01 and US$ 2.56 per pound(lb). The retail price range in Euro for cotton is between EUR 2.06 and EUR 5.22 per kilogram or between EUR 0.94 and EUR 2.37 per pound(lb) in Lisbon and Porto.

It is pertinent to note that for over 100 years, Portugal has been producing the very best 100 percent cotton flannels. The secret to producing the world’s finest flannel fabric begins with the highest-quality cotton. Portugal’s long-staple cotton grows close to the Atlantic Ocean which makes it softer, more durable, and resistant to pilling.

The retail price range for Turkey cotton is between US$ 2.39 and US$ 3.58 per kilogram or between US$ 1.08 and US$ 1.62 per pound(lb). The retail price range in Turkish Lira for cotton is between TRY 47.28 and TRY 70.92 per kilogram or between TRY 21.44 and TRY 32.16 per pound(lb) in Ankara and Istanbul.

The retail price range for Argentina cotton is between US$ 1.23 and US$ 1.27 per kilogram or between US$ 0.56 and US$ 0.57 per pound(lb). The retail price range in Argentine Peso for cotton is between ARS 286.16 and ARS 295.32 per kilogram or between ARS 129.78 and ARS 133.93 per pound(lb) in Buenos Aires and Cordoba.

After the bottom fell out of the market last week, July futures managed small gains for the week but ran into resistance around 80.00 cents per pound.

China Settlement Price: ZCE: Cotton: 2nd Month data was reported at 14,990.000 RMB/Ton in 13 May 2024 (latest date for which data was available). This records a decrease from the previous number of 15,020.000 RMB/Ton for 10 May 2024. China Settlement Price: ZCE: Cotton: 2nd Month data is updated daily, averaging 15,515.000 RMB/Ton from Sep 2004 (Median) to 13 May 2024, with 4785 observations. The data reached an all-time high of 34,270.000 RMB/Ton in 17 Feb 2011 and a record low of 10,255.000 RMB/Ton in 16 Mar 2016. China Settlement Price: ZCE: Cotton: 2nd Month data remains active status in CEIC and is reported by Zhengzhou Commodity Exchange. The data is categorized under World Trend Plus’s Commodity Market.

In the United States the July futures settled at 78.60 cents per pound, finishing 298 points higher for the week. The market reversed early in the week, possibly correcting itself after reaching oversold territory. Pressure came back from weakness in China, specs holding a net short position, and the anticipated release of the WASDE report.

Volumes were heavier towards the end of the week. Total open interest increased by 8,257 contracts to reach a balance of 214,126. Some of the week’s gains can be attributed to the 18,142 bales that were decertified, lowering certificated stocks to 167,979 bales.

The May WASDE provided the first estimates for the 2024/25 U.S. and World crops. The U.S. crop is predicted to be 16.0 million bales, and exports are forecast to be 13.0 million bales. World use is expected to increase to 116.86 million bales, and ending stocks are set to increase to 83.01 million bales.

For the 2023/24 crop, U.S. production decreased 30,000 bales to 12.07 million bales. U.S. ending stocks decreased by 100,000 bales to 2.4 million bales. Exports were held steady at 12.3 million bales. World use in 2023/24 increased 540,000 bales to 113.36 million bales. Ending stocks decreased 2.6 million bales to 80.48 million bales.

Major indexes reacted positively to the recently cooler US economic data, nearing record highs reached earlier this year. U.S. initial jobless claims were higher than expected, supporting the hope that interest rate cuts will occur this year. The U.S. dollar was slightly weaker on declining treasury yields and a rising rate of jobless claims. The Bank of England held interest rates steady, signaling that interest rate cuts might be sharper than expected when they begin.

U.S. export sales were predicted to be good but far exceeded expectations when a net total of 253,700 Upland bales were booked for the week. The biggest buyer of Upland cotton was China with 119,000 bales, followed by Pakistan with 36,300 bales, Vietnam with 27,500 bales, Turkey with 21,500 bales, and Indonesia with 19,600 bales.

Shipments totaled 249,600 bales for the week, only slightly below the pace needed to reach USDA export expectations. New crop sales of 158,900 bales were reported, far above the sales typically for this time frame. A net total of 5,600 Pima bales were sold, and 8,200 bales were shipped for the week.

Now that the cotton market has new data to trade on, the focus will shift back to the weekly Export Sales Report and the Crop Progress Report. Throughout the country, cotton is now 24 percent planted and 24 percent planted in Texas. South Texas received quite a bit of rainfall in the past week, so open skies will be welcome to dry out the fields with water standing. After abnormally hot temperatures in the region early in the week, rain is expected over the weekend in parts of WTX/OK/KS. Planting has started in the area, and rains will be welcomed where seed is in the ground.

Next week will be a little livelier in outside markets. The Consumer Price Index (CPI) and Producer Price Index (PPI) will be released, providing another look at inflation.

As of Thursday afternoon, grower offers totaled 30,933 bales. On the G2B platform 3 bales traded during the week with an average price of 58.00 cents/lb. The average loan was 43.87 cents/lb bringing the average premium received over the loan to 14.13 cents/lb.

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