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Wednesday, June 19, 2024

Global cotton scenario this week and its fluctuations

The local cotton market throughout the week remained sluggish resulting in low trading volumes. Cotton is being traded both in Sindh and Punjab are being traded at same level ranging from Rs 19,000 to Rs 22,000 per maund.

Phutti prices in Punjab ranged from Rs 9,500 and Rs 10,000 per 40 kg. The Spot Rate remained unchanged at Rs 21,500 per maund. Polyester Fiber was available at Rs 367 per kg. There were no reported sales of cotton on Thursday.

Elsewhere in the world the retail price range for Australia 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 Indonesia 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 Indonesia 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 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 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).

Indian cotton panel CCPC estimates higher crop, export and consumption bl-premium-article-image. CCPC lowered last season’s production, raising imports volume. The CCPC raised crop production for the current season (October 2023-September 2024) to 323.11 lakh bales (of 170 kg each) against 316.57 lakh bales estimated in November 2023. Last season,. the crop was pegged at 336.60 lakh bales (343.47 lakh bales earlier).  The Committee on Cotton Production and Consumption (CCPC), a body set up by the government comprising all textile industry stakeholders including farmers, has pegged the crop higher for the current season to September, while raising export and consumption estimates. With Indian cotton prices staying attractive for global buyers, exports of the fibre crop to countries such as Bangladesh, China and Vietnam, have picked up over the past three months. Exports during the first five months of the 2023-24 season starting October were 15 lakh bales (170 kg), at par with 15.5 lakh bales during the entire 2022-23 marketing season.

Cotton Brazil in its March reports stated planting of the 2024 crop has now been fully concluded in Brazil and 58% of it has been sold in advance. In February, Brazil exported 258 thousand tonnes, a 498 percent higher volume than in Feb/23. The overall total for the 2023/24 market year is 1.6 million tonnes, representing 45.6% more than in the same period in 2022/23. In terms of revenue, exports generated US$ 488.2 million in February and US$ 3.115 billion from Jul/23 to Feb/24. With 12 trade missions planned for 2024, Brazil is strengthening its presence at the Bremen Conference. Bringing Brazilian cotton farmers and importers from the global textile industry closer together is one of the main focuses for Cotton Brazil, a brand that represents the Brazilian cotton production chain on a global scale. Between February 26th to March 1st, a Brazilian delegation was in Indonesia and Bangladesh to strengthen trade ties. In addition to technical and business meetings, the Indonesia-Bangladesh Mission also included holding the “Cotton Brazil Outlook” seminar in Jakarta and Dhaka, the capital cities of both countries. Cotton Brazil’s international mission schedule for 2024 also includes the European Market, Thailand, China, Turkey, Egypt, Vietnam, India, Taiwan, Japan and the United States. In the months of July and August, the direction is reversed and Brazilian cotton farmers open their properties to welcome mill owners and importers during an event known as the “Buyers

Abrapa’s forecast (Dec/23) shows an increase of 11.6% of planted area (1.867 thousand hectares) and 3.1 percent in terms of production, totalling 3.37 million tonnes. This estimate will be updated by the end of March. Conab’s latest estimate is for 1,936 thousand hectares (+16,3 percent) and 3.56 million tonnes of cotton lint (+12.2 percent). China continued to lead the ranking of Brazilian exports in February, purchasing 143.9 thousand tonnes and 56 percent of the total volume shipped in the month. The next in the ranking are Vietnam (46.7 thousand tonnes; 18 percent) and Bangladesh (25.6 thousand tonnes; 10 percent). From Aug/23 to Feb/24, Brazil exported 1.629 million tonnes of cotton. This corresponds to 45.6 percent more than what was achieved in the same period in the previous cycle and resulted in revenues of US$ 3.115 billion. In February, the Cepea/Esalq indicator rose by 9.3 percent, ending the month at 87.8 cents per pound. Domestic prices (in dollars) rose 6.4 percent compared to Jan/24. In NY, the May/24 contracts closed the month with an increase of 13.6 percent, at 94 cents per pound.

In the United States May futures finished higher in only one of the five trading days. Last Friday’s bullish USDA report did little to help the market. Fundamentals played almost no part in the sell-off. One exception is an estimated 16.4 million bale Brazilian crop, which, if estimates prove true, would be a new record. May futures closed at their lowest level in over three weeks, losing 580 points to settle at 93.48 cents per pound.

Total open interest added 5,581 contracts, increasing to 278,323, the highest level since November 2021. Certificated stock continued to grow this week, signaling that the futures market might be the best place to sell U.S. cotton right now. Certificated stocks increased by 6,879 bales to 27,765 bales, the highest level since early December. U.S. inflation gauges were slightly above expectations for February, giving the market sufficient data to trade on for the week.

The U.S. consumer price index increased 0.4% in February to 3.2%, remaining above the Fed’s 2% goal. U.S. producer prices rose 0.6% in February to 1.6%, higher than analysts expected. Retail sales were higher in February, rising 0.6% compared to a month earlier, but were still below expectations. The clothing and accessories portion of retail sales were down 0.5% from January, but up 1.3% since last year. Crude oil prices rose for the week on reports of drone strikes on refineries in Russia, and lower inventories.

The U.S. Export Sales Report showed decent sales for the current crop and healthy new crop sales, which was a slight surprise considering the higher prices during the reporting period. A net total of 85,800 Upland bales were booked for the week ending March 7. Despite being low historically, the U.S. is ahead of the sales pace needed to reach USDA’s 12.3 million bale estimate. Even at higher prices, mills still need cotton and appear to be buying it hand-to-mouth. A total of 293,300 Upland bales were exported, surpassing the pace needed to reach USDA’s export estimate. A net total of 6,800 Pima bales were sold, and 6,500 bales were shipped for the week. New crop sales of 112,700 Upland bales were reported, a healthy and above-average amount for this time of the year.

With no PCE reading before next week’s FOMC meeting, this week’s releases of inflation measures will be the primary focus. It is expected that interest rates will remain at the current level. From a fundamental standpoint, next week should be another quiet week in the cotton market. The weekly Export Sales Report and certificated stock will continue to be monitored. The next official planting estimate will be USDA’s Prospective Plantings report, which will be released on March 28, 2024. Cotton prices have performed well, and while cotton acres are expected to be up, grain prices have started to gain ground.

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