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Sunday, April 21, 2024

Cotton scenario this week

Cotton prices remained firm throughout the week but elusive business volume saw a significant downturn. Domestic cotton stocks are low as ginners are sitting on small stocks. Ginners are now left with only a small stock of cotton.

The All Pakistan Textile Mills Association (APTMA) the users of cotton are upset because of the high cost of production as result of unbearable rise in energy and basic interest rates. The industry is bracing for the looming threat of a complete shutdown.

Because of higher cotton production last year the cotton growers earned $1.5 billion more than previous year. The local marker on Thursday continued to remain dull with lackluster trading. Traditionally the trading volumes remain low during Ramadan but this year the mills do not have appetite to procure cotton that reduced volumes below normal Ramadhan levels. The cotton prices both in Sindh and Punjab fluctuated between Rs 20,000 to Rs 22,000 per maund. Phutti prices in Punjab were higher at Rs 9,500 and Rs 10,000 per 40 kg.The Spot Rate remained unchanged at Rs 21,500 per maund.

Elsewhere in the world the cotton rates in different apparel producing countries fluctuated within a wide range. The retail price range for Australian cotton is between US$ 4.06 and US$ 8.71 per kilogram or between US$ 1.84 and US$ 3.95 per pound(lb). The retail price range in Australian Dollar for cotton is between AUD 6.10 and AUD 13.10 per kilogram or between AUD 2.77 and AUD 5.94 per pound(lb) in Canberra and Melbourne. The retail price range for New Zealand cotton is between US$ 1.93 and US$ 2.43 per kilogram or between US$ 0.87 and US$ 1.10 per pound(lb).The retail price range in New Zealand Dollar for cotton is between NZD 3.07 and NZD 3.87 per kilogram or between NZD 1.39 and NZD 1.75 per pound(lb) in Wellington and Auckland. The retail price range for Indonesian cotton is between US$ 0.87 and US$ 1.16 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 14,460.00 and IDR 19,280.00 per kilogram or between IDR 6,557.82 and IDR 8,743.76 per pound(lb) in Jakarta and Surabaya.

The retail price range for Vietnam cotton is between US$ 1.43 and US$ 2.38 per kilogram or between US$ 0.65 and US$ 1.08 per pound(lb). The retail price range in Dong for cotton is between VND 35,771.25 and VND 59,618.75 per kilogram or between VND 16,222.79 and VND 27,037.98 per pound(lb) in Hanoi and Ho Chi Minh City. The retail price range for Cambodia cotton is between US$ 0.25 and US$ 0.44 per kilogram or between US$ 0.11 and US$ 0.20 per pound(lb). The retail price range in Riel for cotton is between KHR 1,028.13 and KHR 1,850.63 per kilogram or between KHR 466.27 and KHR 839.29 per pound(lb) in Phnom Penh and Siem Reap. The retail price range for Thailand cotton is between US$ 1.44 and US$ 3.35 per kilogram or between US$ 0.65 and US$ 1.52 per pound(lb).The retail price range in Baht for cotton is between THB 49.29 and THB 115.01 per kilogram or between THB 22.35 and THB 52.16 per pound(lb) in Bangkok and Chiand Mai.

The retail price range for Turkey cotton is between US$ 2.46 and US$ 3.69 per kilogram or between US$ 1.12 and US$ 1.67 per pound(lb).The retail price range in Turkish Lira for cotton is between TRY 48.75 and TRY 73.12 per kilogram or between TRY 22.11 and TRY 33.16 per pound(lb) in Ankara and Istanbul. The retail price range for Italy cotton is between US$ 8.57 and US$ 23.82 per kilogram or between US$ 3.89 and US$ 10.80 per pound(lb). The retail price range in Euro for cotton is between EUR 7.92 and EUR 22.01 per kilogram or between EUR 3.59 and EUR 9.98 per pound(lb) in Rome and Milan. The retail price range for Spain cotton is between US$ 3.45 and US$ 4.43 per kilogram or between US$ 1.56 and US$ 2.01 per pound(lb). The retail price range in Euro for cotton is between EUR 3.18 and EUR 4.09 per kilogram or between EUR 1.44 and EUR 1.86 per pound(lb) in Madrid and Barcelona.

The retail price range for Kazakhstan cotton is between US$ 0.77 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 343.99 and KZT 544.28 per kilogram or between KZT 156.00 and KZT 246.84 per pound(lb) in Nur-Sultan and Almaty. The retail price range for Bangladesh cotton is between US$ 0.92 and US$ 1.62 per kilogram or between US$ 0.42 and US$ 0.73 per pound(lb). The retail price range in Taka for cotton is between BDT 98.78 and BDT 173.90 per kilogram or between BDT 44.80 and BDT 78.87 per pound(lb) in Dhaka and Chittagong (Chattogram). The retail price range for Myanmar cotton seeds is between US$ 0.44 and US$ 0.93 per kilogram or between US$ 0.20 and US$ 0.42 per pound(lb). The retail price range in Kyat for cotton seeds is between MMK 936.77 and MMK 1,977.62 per kilogram or between MMK 424.84 and MMK 896.88 per pound(lb) in Naypyitaw and Yangon.

In India cotton candy prices witnessed a decline, settling at 62080, down by -0.7%, driven by revised production estimates and increased supply expectations. The Cotton Association of India (CAI) revised its cotton production estimate upwards for the current season, reaching 309.70 lakh bales, while the Cotton Crop Promotion Council (CCPC) raised its production estimate to 323.11 lakh bales. These upward revisions contributed to increased market supply forecasts, pressuring prices downwards.

Additionally, the Southern India Mills’ Association (SIMA) urged textile mills to refrain from panic buying amid recent price hikes, indicating a potential stabilization in demand. Global cotton supply and demand estimates for 2023/24 also showed higher production and consumption, with lower ending stocks. Despite lower U.S. and Argentine crops, increased production in India offset the decrease, leading to higher global production. However, increased consumption in China and India balanced the equation, resulting in marginally lower ending stocks.

In the United States cotton futures finished lower for the week at 91.38 cents per pound but managed to recover some of the week’s losses after the release of Thursday’s Prospective Plantings report. May futures closed at 91.38 cents per pound, finishing 83 points lower for the week.

News in the cotton market was relatively light this week, as traders were anticipating the Prospective Plantings report. The first of the major indexes began to roll this week. That, combined with a higher dollar and continued consolidation, accounted for Wednesday’s sharp decline.
USDA’s Prospective Plantings report came in as a slight surprise, seeing how many analysts expected a number above the 11.0 million acre estimate in February. A total of 10.67 million acres of cotton are expected to be planted in the U.S. in 2024. Total open interest rose by 4,323 contracts, increasing to a balance of 278,577. Certificated stocks continue to build and were last reported at 52,224, increasing 10,468 from the week prior.

Major indexes notched their fifth straight month of gains and recorded a robust rally for the year’s first quarter. The U.S. Dollar had another strong week, finding support from weakness in other currencies. March U.S. Consumer Confidence was 104.7, essentially unchanged from February’s number. Cocoa futures surged above $10,000 per metric ton this week, rallying on the fourth year of shorter supply and varying financial factors.

U.S. export sales and shipments were on par with expectations for the week ending March 21. A net total of 98,200 Upland bales were booked, and 360,700 bales were shipped during the reporting period. New crop sales of 72,200 bales were average for this point of the year, increasing from last week.

Reported Pima sales were a drastic improvement compared to prior weeks. A net total of 13,500 Pima bales were sold, and 4,500 bales were shipped for the week. The market has already started rolling positions forward, so major funds will continue. Aside from heavier flows, the U.S. Export Sales Report will continue to be the central focus.

In the week after next, the World Agricultural Supply and Demand Estimates (WASDE) will be released on May 11, and May cotton options will expire on May 12. As of Thursday afternoon, grower offers totaled 40,721 bales. On the G2B platform 302 bales traded during the week with an average price of 89.52 cents/lb. The average loan was 54.56 bringing the average premium received over the loan to 34.96 cents/lb.

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