As the cotton market in Pakistan remained dull the international cotton markets were generally going up. New York cotton’s rate of Future Trading for the month of March fluctuated from 83.5 US cents to 87 US cents per pound.
In India, cotton prices slightly increased after the Cotton Association of India indicated a decrease of about 9 lakh bales in cotton production. The cotton production in India was estimated at 3.30 million bales by the association. The latest USDA outlook report indicated a projection for world cotton production at 115.4 million bales in 2022/23, marginally below the 2021/22 crop, as a slowdown in the global economy has reduced cotton mill use prospects for this season.
In 2023, the approximate price range for Brazil Cotton is between US$ 1.62 and US$ 1.71 per kilogram or between US$ 0.73 and US$ 0.78 per pound(lb). In 2023, the approximate price range for Australia Cotton is between US$ 2 and US$ 2.01 per kilogram or between US$ 0.91 and US$ 0.91 per pound(lb). China Settlement Price: ZCE: Cotton in January 2023 (RMB/Ton) stood at 14850.000 as on 20 Jan 2023.
Cotton futures traded higher for three of the four trading sessions during the shortened trading week. March futures started the week trading sideways before rallying and recovering some of the losses seen after last week’s bearish WASDE report. The main driver for the rally was talk of increased demand stemming from positive price moves in China. The upward momentum was short-lived, however, and prices fell back to stay in the price range that’s become the norm recently. For the week ending January 19, March futures closed at 83.39 cents per pound, up 135 points from the prior week. Total open interest was relatively unchanged compared to last week, decreasing 118 contracts to close the week at 202,359.
Pakistani spinners are buying whatever cotton is available in Afghanistan due to which there were bullish trends in Afghanistan cotton. Textile spinners’ banks are unable to open L/Cs of imported cotton which created a panic among the spinners. As they started panic buying during the last two weeks but after a sharp price rise they were forced to restrict their buying. The cotton prices that increased in the last two weeks by Rs. 4000-5000 per maund eased after purchasing was slowed down by the spinners by Rs1000 to Rs. 2000 per maund.
The closure of over 150 mills as indicated by the All Pakistan Textile Mills Association also reduced the normal demand. Market experts do not see any further increase in cotton rates as mills cannot buy at further higher rates. Importing cotton on a large scale is inevitable for the surviving spinners. During last week the rate of cotton in Sindh ranged between Rs. 16000 to Rs. 20000 per maund. The rate of cotton in Punjab fluctuated between Rs. 18000 to Rs 20,000 per maund. The rate of Phutti in Sindh was between Rs 6000 to Rs. 5000 per 40 kg. The rate of Phutti in Punjab was higher, ranging between Rs 7000 to Rs 10200 per 40 kg.
The largest cotton transactions were carried on Saturday, January 21 when about, 1600 bales of Rohri were sold at 17500 per maund, 1200 bales of Khanewal were sold at Rs. 20000 per maund, 400 bales of Mian Wali were sold at Rs 19000 per maund, 800 bales of Chichawatni were sold at Rs19500 to Rs 19800 per maund, 200 bales of Sadiqabad, 1200 bales of Rahim Yar Khan, 400 bales of Khan Pur were sold at Rs. 20000 per maund and 800 bales of Marrot were sold at Rs. 19500 per maund. Thereafter the sales remained subdued, on Wednesday, January 25, around 200 bales of Ghazi Ghat were sold at Rs. 20,000 per maund and 400 bales of Dera Ghazi Khan (Balochi Cotton) were sold at Rs. 20500 per maund. On Tuesday around 400 bales of Ghotki were sold at Rs. 20000 per maund.
Export of US cotton in the week ending on January 19, the net sales from the current crop year reached 209400 Upland bales, up substantially from what has recently been reported. China was back in the action, booking 55,100 Upland bales, followed by Pakistan booking 43,600 bales, Vietnam with 42,500 bales, and Turkey with 25,600 bales. Shipments also improved, with 183,100 bales shipped for the week. For the 2023/24 crop year, 26,900 bales were sold. Pima sales were down compared to last week, with 2,500 bales contracted. Shipments were about the same with 6,300 Pima bales shipped for the week.
