23 C
Lahore
Sunday, April 21, 2024

Global cotton scenario this week

Pakistan’s cotton market on Thursday as well as throughout the week remained steady though the trading volume remained low.

The rate of cotton in Sindh and in Punjab remained the same fluctuating between Rs 20,000 to Rs 22,500 per maund. Phutti prices in Punjab were locked between Rs 8,500 and Rs 10,200 per 40 kg.

On Thursday 1300 bales of Khair Pur were sold at Rs 21,200 per mand 200 bales of Fort Abbas were sold at Rs 2200 per maund. The Spot Rate remained unchanged at Rs 21,500 per maund. Local spinners have more confidence in Pakistan Ginners Association who state a very low cotton harvest this year than official figures which put production at high end. This is the reason that all spinners that could afford are trying to import cotton from the most competitive source.

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 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 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 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 Sri Lanka cotton is between US$ 0.31 and US$ 0.39 per kilogram or between US$ 0.14 and US$ 0.18 per pound(lb). The retail price range in Sri Lanka Rupee for cotton is between LKR 94.09 and LKR 120.55 per kilogram or between LKR 42.67 and LKR 54.67 per pound(lb) in Colombo and Jaffna.

The retail price range for Brazil cotton is between US$ 1.56 and US$ 1.64 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 7.78 and BRL 8.21 per kilogram or between BRL 3.53 and BRL 3.72 per pound(lb) in Brasilia and Rio de Janeiro.

The retail price range for Nicaragua cotton is between US$ 0.85 and US$ 1.92 per kilogram or between US$ 0.39 and US$ 0.87 per pound(lb). The retail price range in Cordoba Oro for cotton is between NIO 31.09 and NIO 70.13 per kilogram or between NIO 14.10 and NIO 31.80 per pound(lb) in Managua and León.

 Here we have listed important places like Gujarat, Maharashtra, Karnataka, Telangana, Andhra Pradesh. Apart from this, we have also listed the cotton market of all the cities, where you can check the cotton rate today of your nearest city.

In the United States May futures reached a contract high on Wednesday, fueled largely by speculative buying.  A tightening U.S. balance sheet and speculative buying pushed May cotton over the dollar mark for the first time in a year and a half.

The May and June futures contracts finished up the limit on Tuesday. The disparity between the prices of the July and December contracts is cause for concern.

Speculative trend following has been taking place in the current crop months, but the bullish technical outlook is currently not transferring to the new crop prices. A disappointing Export Sales Report caused some selling after the week’s sharp rally. May futures had a volatile week but eventually settled at 99.57 cents per pound, up 511 points for the week.

Total open interest managed to add 5,072 contracts, increasing the total to 270,786 contracts.  After reaching new highs throughout the week, the stock market closed with the most robust monthly gains since 2019.

The Personal Consumption Expenditure (PCE) came in as analysts expected, rising 2.4 percent year-over-year, and the core deflator rising 2.8 percent year-over-year. Chances of an interest rate cut before June are limited despite recording the lowest rise of inflation in almost 3 years. U.S. weekly initial unemployment claims climbed slightly more than anticipated.

Crude oil finished the week moderately higher, finding support from geopolitical tensions. Congress passed a short-term spending agreement to prevent a government shutdown this weekend. Demand for U.S. cotton diminished with the recent rise in prices. A net total of 40,000 Upland bales were booked for the week, below what was expected.

The U.S. does not need to sell a lot of cotton to reach the current export estimate, but this week’s sales were below the required pace. China’s return to the marketplace after the New Year holiday was disappointing. Turkey was the biggest buyer of U.S. cotton for the week ending February. A total of 267,100 Upland bales were exported, slightly below the pace needed to reach the USDA export estimate.  A net total of 5,500 Pima bales were sold, and 4,400 bales were shipped for the week.New crop sales of 13,400 Upland bales were below average for this time of the year.

The World Agricultural Supply and Demand Estimates (WASDE) Report will be released on Friday, March 8 at 11:00 a.m. CST. The market is waiting to see if USDA will adjust the balance sheet. The average price of December cotton during February was 83.38, lower than last year but when compared to other commodities, could favor cotton as planting decisions are being made.

Meanwhile, the latest Cotton This Month report by the ICAC has unveiled a significant surge in the price of cotton, transcending initial market projections. This unexpected increase can be attributed primarily to a wave of speculative buying on the futures market.

The actions of speculative buyers have significantly increased the demand for futures contracts, ultimately exerting an upward force on cotton prices. A common pattern emerges as speculators invariably attract additional participation in the market, creating a feedback loop that escalates buying pressure and, consequently, prices.

The real story will start to unfold in the next few months when planting intentions are solidified (at least in the Northern Hemisphere). Planting intentions have been lower than in previous years, and it remains to be seen whether the recent higher prices will incentivize farmers to increase the area under cotton.

If the planted area remains below previous seasons’ levels, and consumer sentiment improves — thus driving demand up in the 2024/25 season — then we can certainly expect higher prices to materialize and be justified by fundamentals, especially given the lower stocks in many of the largest countries.

The Secretariat’s current price forecast of the season-average A-index for 2023/24 ranges from 83.5 cents to 102.3 cents, with a midpoint of 91.73 cents per pound.

Moreover, the ICAC says all fibers — natural and otherwise — must be held to the same standard, but some of the major legislation being crafted now does not provide a level playing field.

It points out it can be difficult for legislators to grasp the complexities of the textiles industry, and that is where the danger lies. All fibers — natural and otherwise — must be held to the same standard, but some of the major legislation being crafted now does not provide a level playing field.

The biggest issue by far is the Uyghur Forced Labor Prevention Act (UFLPA). Under UFLPA, any product made in whole or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR or Xinjiang) — or has any nexus with Uyghurs, an ethnic Muslim minority people that live in Xinjiang — the law presumes the product is made with forced labor and, therefore, the product can be stopped by Customs at the US border under the US forced labor statute. Why does this matter for our industry? Because 95 percent of cotton produced in China is grown in Xinjiang … which means 20 percent of the world’s cotton is grown in Xinjiang.

To date, US Customs has detained more than 1,200 cotton apparel shipments into the United States, not only from China but from Vietnam, Cambodia, the Philippines, Sri Lanka, Nicaragua, and other countries. 

Related Articles

Stay Connected

11,285FansLike
394FollowersFollow
9,180SubscribersSubscribe

Latest Articles