Lack of demand impacted cotton prices forcing the Karachi Cotton Association (KCA) to drop its rate by Rs 200 in the spot rate. The new price has now been fixed at Rs 17,000 per maund. The prices earlier remained stagnant at Rs 17,200 for the last few days.
Trading in the cotton market remained sluggish on Thursday and volume also remained lower. Market analysts say that the sluggish business activities were the outcome of the financial crises of the textile industry with increasing energy tariffs. Only selected buying as per immediate requirements was seen in the market.
As a result, a reduction in cotton prices was witnessed due to the sluggish activities, and cotton from Sindh fetched at Rs 15,000 per maund to Rs 17, 200 per maund. Phutti Sindh fetched Rs 5,000 per maund to Rs 7,200 per maund. Prices of cotton from different areas of Punjab were registered at Rs 15,800 per maund to Rs 17,500 per maund and Phutti prices were seen at Rs 5,500 to 7,600 per maund.
Similarly, prices of cotton from Balochistan were registered at Rs 17,000 per maund to Rs 17,500 per maund and Phutti from this province fetched prices of Rs 6,500 to Rs 8,200 per maund. As far as Phutti is concerned Phutti rates in Balochistan differ in different districts but it remains highest in the country. Phutti rate in district Kech (Turbad was Rs8000 per 40 kg, in district Lesbela it was available at Rs7500 per 40 Kg, in Kharan the price ranged from Rs9500 to Rs 9850 per 40 kg and in Khuzdar it averaged Rs9300 per 40 kg.
As per the domestic transactions mentioned by the daily market report, 600 bales of Dherki were transacted today while 400 bales each from Ghotki and Shahdadpur, 1400 bales from Khairpur, 400 bales from Rohri, 2600 bales from Rahim Yar Khan, 1000 bales from Sadiqabad, 400 bales from Khanpur, 800 bales from Mianwali, 400 bales each from Layyah and Harooanabad, 200 bales each from Hasilpur and Bahawalpur and 2000 bales from Yazman Mandi were transacted today.
After pink worms hit the Bt cotton crop in recent years Indian researchers are turning towards normal cotton seeds. Four Indian states showed promising results of traditional cotton seeds developed by researchers.
Almost 98 percent of the 12 million-odd hectares of cotton grown in India is under Bt cotton. The genetically modified cotton technology, which was introduced in the early 2000s, has engulfed the whole of the country’s cotton acreage and made traditional non-GM cotton varieties disappear.
Farmers saw hope in GM cotton as it offered protection from pink bollworm, which sucked life out of the bolls, and other such pests causing enormous losses.
Global cotton production will likely be 5 million bales (217.7 kg) lower this season (October 2023-September 2024) as the output in China, the US, Australia, and India has been affected.
The 2022-23 season has been reported as the highest-quality Australian cotton crop ever. Based on good quality the Australian traders hope higher exports this year.
Chinese cotton continued under pressure because Wexton co-sponsored the Uyghur Forced Labor Prevention Act (UFLPA), a law banning products from China’s Xinjiang region after a Bloomberg investigation last year found scientific evidence that cotton produced in the region, alleged to be made using forced labor, was present in clothing sold by Shein and same cotton was found in textiles from Vietnam.
The Brazilian Cotton Growers Association estimates cotton production in 2022/2023, will be 3.23 million tons of lint.
The retail price range for Portugal cotton is between US$ 2 and US$ 6 per kilogram or between US$ 0.91 and US$ 2.72 per pound(lb). The retail price range in Euro for cotton is between EUR 1.85 and EUR 5.54 per kilogram or between EUR 0.84 and EUR 2.51 per pound (lb) in Lisbon and Porto. In 2023, the approximate wholesale price range for Portugal cotton is between US$ 1.63 and US$ 4.13 per kilogram or between US$ 0.74 and US$ 1.87 per pound (lb).
Africa stands out in cotton cultivation as unlike many parts of the world, cotton is grown in large plantations, but in Africa, it is almost exclusively cultivated by smallholder farmers using crop rotation. Crop rotation means that the cotton is grown alternately with other crops, such as basic food crops like maize, soy, or groundnuts. That reduces both leaching from the soil and the occurrence of pests. Cotton is often a complementary cash crop: it is cultivated for sale, alongside foods grown for subsistence. The cultivation methods imparted by Cotton Made in Africa also support smallholder farmers in growing food and thus make an important contribution to food security.
In the United States trader’s focus has now shifted to the March contract as the stock market continued to climb higher. The Bull Run has continued for over four weeks.
The holiday-shortened trade week was busy with many traders clearing out the rest of their December positions. First Notice Day is on Friday, and daily volume has been active leading up to it. Prices continued to be range-bound this week, having little fundamental or technical data to trade on. One thing to note, however, was that China’s cotton prices were lower this week, which put a little pressure on ICE futures. With one less trading day being covered this week and no export sales to cover on this Cotton Market Weekly, the news was light. For the week ending November 22, December futures settled at 79.58 cents per pound, up 90 points. March futures settled marginally higher than last week, finishing at 80.90 cents per pound, up 2 points from last Thursday. The certificated stock increased from 3,246 bales to 88,552 bales. Total open interest declined to the lowest level since this past summer, falling 12,198 contracts to reach 194,350 contracts.
Activity in outside markets was quiet as well, but major indexes continued to climb higher for the week. The stock market has fared well on positive comments from the Fed and encouraging corporate news. The last close marked three straight weeks of wins for the stock market, with Friday likely to make it four consecutive weeks. Crude oil came off last Thursday’s low but was under pressure on Wednesday when OPEC announced they would delay a meeting that was scheduled to take place on Sunday. The U.S. Dollar was lower, becoming weaker as foreign currencies rallied on stronger economic data and lower U.S. treasury rates. Geopolitical tensions have also eased slightly when it was announced that Israel and Hamas agreed to have a four-day humanitarian cease-fire to release hostages. The stock market is closed on Thursday for the Thanksgiving holiday
Now that December is behind the vast majority of traders, the focus will shift to the March contract and typical news releases. The Export Sales Report for the week ending November 16 has been delayed until Friday and will be discussed in next week’s Cotton Market Weekly. Many are expecting the report to hold another week of good sales, as the past few weeks’ lower prices have increased demand. Now that harvest is 80 percent complete across the country, classing and receiving will be key focal points in the coming week. The market will be closed on Thursday and have shortened hours on Friday, but normal hours have resumed this week.
