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Wednesday, June 19, 2024

Cotton scenario this week

In Sindh the cotton crop is sown much earlier than Punjab. This is the reason that the arrival of cotton of the new season 2024-25 has started as 200 bales of cotton as a ginning factory from Hyderabad sold the fresh ginned cotton at Rs 20,400 per maund.

It is expected that more ginning factories will start their operations from the coming week. The Phutti of the new season, which is coming from different areas of Interior Sindh, is available at Rs 9,000 to Rs 10,500 per 40kg. Though the local cotton market remained bearish, the trading volume remained low.

In Punjab the sowing of cotton has been delayed in many areas due the government’s refusal to buy wheat that has just been harvested. The new crop arrival will also be late this year. The demand for cotton is on the rise in the local market. Anticipating delays Pakistani spinners are regularly booking cotton from the United States and Brazil.

Generally the cotton prices in Sindh and Punjab ranged from Rs 19,500 to Rs 21,500 per maund, while Phutti prices in Punjab were between Rs 9,500 and Rs 10,000 per 40 kg. 400 bales of Khan Pur were sold at Rs 22,000 per maund.

We are appending below the cotton rates in 11 major cotton producing countries in the world.
The retail price range for Australian cotton is between US$ 4.13 and US$ 8.88 per kilogram or between US$ 1.88 and US$ 4.03 per pound(lb). The retail price range in Australian Dollar for cotton is between AUD 6.22 and AUD 13.36 per kilogram or between AUD 2.82 and AUD 6.06 per pound(lb) in Canberra and Melbourne.

The retail price range for Mali cotton is between US$ 0.78 and US$ 1.56 per kilogram or between US$ 0.35 and US$ 0.71 per pound(lb). 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 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.

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 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 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 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.

China’s internal cotton price (the blue line) is usually higher than world prices, and this has been the case in recent months with the uptrend in Chinese prices. For the week ending May 2, 2024, China’s cotton prices were lower prior to going on May Day vacation. the A-Index of world cotton prices trended lower across the week.

In India, Today’s price of a Cotton 29mm is ₹55,900 and is witnessing a declining a trend of 0.36%. Cotton, both as a crucial commodity and an intriguing investment, boasts a rich historical legacy as a textile fiber dating back to prehistoric times.

In Brazil at this moment, cotton bolls are beginning to open in some of its producing regions. Producers are gearing up for the harvest, which starts in May and intensifies in June. By the end of April, 93 percent of the total Brazilian cotton crop for 2023 had been sold. Pre-sales for the 2024 crop reached 62 percent.

In April, Brazilian exports totaled 241.5 thousand ton, 296 percent higher than in Apr/23. Shipments so far in the market year (Aug/23-Apr/24) total 2.124 million ton – which corresponds to 69.1 percent more than the amount shipped from Aug/22 to Apr/23.

According to Abrapa, the area planted to cotton in Brazil is expected to reach 1.935 million hectares for the 2024 crop. As a result, production is expected to reach 3.5 million ton of cotton. If confirmed, this will represent an increase of 7.7% compared to the volume harvested in the previous season.

In April, 29% of Brazilian exports went to China (70,504 ton). Vietnam accounted for 20 percent of shipments (49,098 ton). The exports to Bangladesh accounted for 14 percent of the shipments (33,143 ton). Pakistan imported 28009 ton of cotton from Brazil which was equivalent to 12 percent of Brazil’s exports in April.

In the United States the cotton futures traded on both sides of the market but gave back the previous week’s gains. July futures fell 236 points from last week’s close, settling at 76.24 cents per pound. The July contract closed down on Tuesday. This week’s bearish technical outlook gave speculators room to increase their short positions, pushing the market down two of the five trading sessions. Encouraging economic data released throughout the week allowed the market to recoup some early losses.

The daily volume traded was light at the start of the week but became more active after technical signals were hit and economic data was released. Total open interest added 8,942 contracts to reach a balance of 223,068. New additions were reported to certificated stock. An increase of 14,891 bales brings the total certificated stock to 182,870 bales.

Promising inflation data helped push major indexes to record highs on Wednesday. The April U.S. Consumer Price Index (CPI) was better than expected, increasing 0.3% month over month and 3.4% year over year. So far, this has been the slowest rise in inflation for 2024. U.S. Retail Sales were also encouraging, rising 1.6% month-over-month and 2.7% on the year.

The April U.S. Producer Price Index (PPI) was hotter than expected, rising 0.5% month over month and 2.2% year over year. Despite the mixed economic data this week, the market expects an interest rate cut before 2024 ends. The Dow Jones Industrial Average surpassed 40,000 for the first time.

Relations between the U.S. and China hit a new snag when President Biden issued tariffs on EV import products. Although still high, the U.S. Dollar suffered a sharp decline.

Despite reporting fewer sales than last week, the U.S. managed to book a respectable 156,500 bales of Upland cotton for the week. Upland shipments totaled 238,800 bales for the week. Exports are behind the pace needed to reach the 12.3 million bale estimate. China was the biggest buyer of Upland cotton, with 63,600 bales, followed by Vietnam with 27,600 bales, Pakistan with 22,600 bales, Turkey with 17,100 bales, and Indonesia with 9,400 bales.

New crop sales remain healthy for this time of the year, with 140,600 bales sold. A net total of 3,600 Pima bales were sold, and 5,200 bales were shipped for the week.

Next week should be a quieter week for data releases. The coming week’s central focus will be the Export Sales Report and Monday’s Crop Progress Report. Any excess attention will fall on weather forecasts and broader markets.

According to this week’s Crop Progress report, 33 percent of the expected cotton acreage has been planted throughout the country. Planting in the Southwest is right at the average pace. There have been spotty storms throughout West Texas, Kansas, and Oklahoma this week, but next week is expected to bring drier weather and above-average temperatures. South Texas has also received rain, but dry conditions are forecast in the coming week.

As of Thursday afternoon, grower offers totaled 30,232 bales. On the G2B platform, 701 bales traded during the week with an average price of 67.66 cents/lb. The average loan was 51.43 cents/lb bringing the average premium received over the loan to 16.23 cents/lb.

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