There is uncertainty in Pakistan’s cotton market. The new crop has started arriving from Sindh but the actual size of cotton always remains uncertain even if the crop is promising at initial stage. The threat of pests remains high by the time the crop matures.
The local cotton market during the week remained steady and the trading volume remained low. The rate of new cotton in Sindh is in between 20,000 to Rs 20,500 per maund. The rate of Phutti in Sindh is between Rs 9,000 to Rs 10,000 per 40 kg. The rate of cotton in Punjab is in between Rs 20,500 to Rs 21,500 per maund. The rate of Phutti in Punjab is between Rs 10,000 to Rs 12,000 per 40 kg. The Spot Rate remained unchanged at Rs 19,700 per maund, and polyester fibre was available at Rs 367 per kg.
Elsewhere in the world cotton rates in eleven cotton producing countries are appended below. The rates of cotton in Pakistan and United States are discussed separately. These economies account for more than 90 percent of total global cotton production.
The retail price range for Australian cotton is between US$ 4.04 and US$ 8.67 per kilogram or between US$ 1.83 and US$ 3.93 per pound(lb). The retail price range in Australian Dollar for cotton is between AUD 6.07 and AUD 13.04 per kilogram or between AUD 2.75 and AUD 5.91 per pound(lb) in Canberra and Melbourne.
The retail price range for Argentina cotton is between US$ 1.21 and US$ 1.25 per kilogram or between US$ 0.55 and US$ 0.57 per pound(lb). The retail price range in Argentine Peso for cotton is between ARS 281.73 and ARS 290.75 per kilogram or between ARS 127.77 and ARS 131.86 per pound(lb) in Buenos Aires and Cordoba.
The retail price range for Brazil cotton is between US$ 1.59 and US$ 1.67 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 7.93 and BRL 8.37 per kilogram or between BRL 3.60 and BRL 3.80 per pound(lb) in Brasilia and Rio de Janeiro.
The retail price range for China cotton seeds is between US$ 2.26 and US$ 5.29 per kilogram or between US$ 1.02 and US$ 2.40 per pound(lb). The retail price range in Yuan Renminbi for cotton seeds is between CNY 15.81 and CNY 37.10 per kilogram or between CNY 7.17 and CNY 16.83 per pound(lb) in Beijing and Shanghai.
The retail price range for Egypt cotton is between US$ 4.95 and US$ 5.94 per kilogram or between US$ 2.24 and US$ 2.69 per pound(lb). The retail price range in Egyptian Pound for cotton is between EGP 154.56 and EGP 185.48 per kilogram or between EGP 70.10 and EGP 84.12 per pound(lb) in Cairo and Alexandria.
The retail price range for India cotton seeds is between US$ 0.49 and US$ 1.18 per kilogram or between US$ 0.22 and US$ 0.53 per pound(lb). The retail price range in Indian Rupee for cotton seeds is between INR 40.72 and INR 97.73 per kilogram or between INR 18.47 and INR 44.32 per pound(lb) in New Delhi and Mumbai.
The retail price range for Kazakhstan cotton is between US$ 0.75 and US$ 1.19 per kilogram or between US$ 0.34 and US$ 0.54 per pound(lb). The retail price range in Tenge for cotton is between KZT 336.69 and KZT 532.74 per kilogram or between KZT 152.69 and KZT 241.60 per pound(lb) in Nur-Sultan and Almaty.
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 475.22 and XOF 950.44 per kilogram or between XOF 215.52 and XOF 431.04 per pound(lb) in Bamako and Sikasso.
The retail price range for Portugal cotton is between US$ 2.24 and US$ 5.66 per kilogram or between US$ 1.01 and US$ 2.57 per pound(lb). The retail price range in Euro for cotton is between EUR 2.07 and EUR 5.23 per kilogram or between EUR 0.94 and EUR 2.37 per pound(lb) in Lisbon and Porto.
The retail price range for Turkey cotton is between US$ 2.41 and US$ 3.61 per kilogram or between US$ 1.09 and US$ 1.64 per pound(lb). The retail price range in Turkish Lira for cotton is between TRY 47.72 and TRY 71.58 per kilogram or between TRY 21.64 and TRY 32.46 per pound(lb) in Ankara and Istanbul.
The retail price range for Uzbekistan cotton is between US$ 0.49 and US$ 0.89 per kilogram or between US$ 0.22 and US$ 0.40 per pound(lb). The retail price range in Uzbekistan Sum for cotton is between UZS 6,148.75 and UZS 11,067.75 per kilogram or between UZS 2,788.55 and UZS 5,019.39 per pound(lb) in Tashkent and Samarkand.
According to International Cotton Advisory Committee the last few years have been anything but smooth for the cotton trade. Some of the problems are not all that uncommon, such as international trade disputes, while others are — happily — the kind that only come around once in a century.
Yangxuan Liu, associate professor from the University of Georgia, provided an update on the ongoing dispute between the world’s largest exporter and the world’s largest importer. His article on ICAC website titled “The Status and Impacts of the USA-China Trade Dispute on the Cotton Industry” is worth reading as is the article on”The West African Lint Trade.” by ICAC’s Commodity Trade Analyst, Parkhi Vats, which offers an overview of the cotton situation in West Africa, where some countries are more actively seeking to process their fiber in-country.
Another article to go through is titled “From Pandemic Recovery to Geopolitical Shocks: The Volatile Journey of Commodity Prices.” The final feature article is authored by the editor of the Review, Economist Lorena Ruiz, and tries to bring some order to the many chaotic events that have been buffeting the cotton industry over the last five years.
Though Egyptian cotton is rated one of the best in the world but Egyptian textile industry has increased use of Brazilian cotton. In the 2022/23 season, Egyptian imports of Brazilian cotton totalled 99.5 tonnes. From August 2023 to March 2024, this amount had already reached 8,521 tonnes – 85 times more than in the 12 months of the previous market year.
“The Egyptian market needs Brazilian cotton to complement the fiber mix used by their spinners, and the quality of our cotton is well-regarded by the Egyptians”, explained Abrapa’s President, Alexandre Schenkel.
In this regard a Brazilian delegation visited the Bidewi group in Alexandria – the first Egyptian spinners to import cotton from Brazil. And the feedback was positive. “Brazilian cotton stood out in terms of operational performance and fibre quality compared to other countries. The key word is complementarity because, in addition to Egyptian long fiber, the textile industry also needs medium staple fibre,” Mr. Schenkel added.
In Cairo, the Egyptian capital, Abrapa held an edition of the “Cotton Brazil Outlook” seminar, where Abrapa’s Director of International Relations, Marcelo Duarte, provided updates on the 2024/25 crop season and future outlooks. The talk also emphasized the main assets of Brazilian cotton, highlighting the fact that more than 80% of Brazilian cotton has socio-environmental certification.
In the United States the cotton futures traded on both sides of the market but ultimately settled lower for the week. Since last week’s close, July futures gave up 232 points, settling at 75.44 cents per pound.
The focus has started to shift to the December futures contracts, which is the lead contract based on open interest. December futures settled at 73.60 cents per pound, 291 points lower than last week.
July futures dropped as low as 72.26 cents per pound but eventually found support on a slightly oversold market and speculators rolling positions forward. There are concerns that prices could continue to fall.
Daily volume traded remained relatively strong this week. Total open interest was increased by 2,548 contracts to 231,839. Bales eligible for delivery against futures decreased by 4,302 bales, bringing total certificated stock to 129,146 bales.
The stock market had a strong week, with the NASDAQ and S&P 500 posting new highs. The European Central Bank and the Bank of Canada lowered interest rates this week for the first time since 2019, becoming the first major central banks to cut interest rates.
Crude oil prices fell early in the week on news that OPEC would restore some production. Prices managed to recover some losses by the week’s end. The U.S. ISM Manufacturing PMI was weaker than expected, registering at 48.7% and contracting for the second consecutive month. U.S. employers added 272,000 jobs in May, an unexpectedly strong number given the concerns about high interest rates and the slowdown in consumer spending. However, the unemployment rate rose to 4.0 percent from 3.9 percent. Data out Wednesday from the BLS suggested payrolls might have grown at a much slower monthly pace on average last year than initially reported.
Despite decent export sales for the week, shipments need to average 250,000 bales per week to reach USDA’s 12.3 million bale estimate. Exporters sold a net total of 138,700 Upland bales for this crop year and 54,100 bales for the next marketing year, typical for this point in the year. Shipments of 157,000 bales slowed significantly from recent weeks. Total exports are below normal for this point in the marketing year. A net total of 2,000 Pima bales were sold, and an impressive 8,100 bales were shipped.
Next week, nothing matters more than the June 12 release of the World Agricultural Supply and Demand Estimates (WASDE) report. The Goldman Sachs Commodity Index Roll has begun, and July options are expiring. Traders will be active as they exit their July positions and reestablish them in December. July First Notice Day is on June 24.
According to this week’s Crop Progress report, U.S. farmers have planted 70 percent of expected cotton acreage, and 9 percent is squaring. Precipitation concerns are building in parts of South Texas, and dryland planting is progressing rapidly in West Texas, Oklahoma, and Kansas.
As of Thursday afternoon, grower offers totaled 17,531 bales. There was no activity on the G2B platform this week.
