Page 18 - TEXtalks. July- August 2023

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Cotton trading depicted uncertainty

almost around the world

The cotton market in Pakistan is currently facing a of 129 points, only to be followed by Monday’s
major disruption caused by the declining descent of 192 points. Tuesday’s market action was
international price of cotton phutti. This downward the most surprising of the week as December futures
trend in global prices is having far-reaching rallied 287 points. This had some analysts perplexed
implications for the local market, exacerbating as this was the day prior to the WASDE release and
existing conflicts between the government and more times than not, a quiet trading day.
ginners and creating challenges for cotton growers.
These issues paint a bleak picture for Pakistan’s Although the better-than-anticipated inflation news
cotton sector. helped stocks rally, it is still likely the Fed will raise
interest rates at the next Federal Open Markets
Xinjiang produces about 90% of China’s cotton but Committee (FOMC) meeting at the end of the
acreage has dropped by about 8% this year, partly month. Crude oil was up significantly for the week,
because of cold, rainy weather that killed off shoots providing an additional boost to cotton prices. Major
in the spring, according to a China-based trader. indexes were also up, with the NASDAQ and S&P
The Ministry of Agriculture and Rural Affairs said in 500 setting 52-week highs. The U.S. Dollar toppled
its monthly crop update last week that high this week, hitting a 52-week low, helping boost
temperatures had impacted cotton bud growth in commodities.
some regions.
The world side of the balance sheet saw
Cotton imports are expected to be 1.45 million considerable changes. Heading into the end of the
metric tons, the ministry said in its monthly China 22/23 marketing year, ending stocks on the July
Agricultural Supply and Demand Estimates report were increased by 1.06 to 93.95 million bales.
(CASDE), a reduction of 400,000 tons from last This was a result of larger production seen in Australia
month’s forecast. and Brazil that outweighed increases in domestic
use. For the 2023/24 crop year, world production
In the United States Cotton in Rollercoaster Fashion was raised by 120,000 bales due to larger crops in
last week with December finishing up 180 points for Pakistan. World consumption was lowered by
the week. Friday the market posted a positive move 550,000 bales totaling 116.45 million bales.

July/August 2023