ICE cotton futures – During the National Day, ICE cotton futures continued to follow the fluctuations of the external market. The main December contract briefly rose to 90 cents and then fell again. It hit a new low of 81.55 cents in this round of decline, falling below It reached the previous low of 82.54 cents in July. As of October 7, the main December contract closed at 84.23 cents, down 1.11 cents or 1.3% from September 30. The current macro situation continues to dominate the market trend, and new cotton is about to be launched intensively. Fundamentals are also difficult to support a sharp rebound in cotton prices, and the market will continue to be under pressure in the short term.
ICAC Forecast – The October global production demand forecast released by the International Cotton Advisory Committee (ICAC) believes that the cotton market faces three major threats in 2022/23: declining production, reduced consumption and market instability. ICAC estimates that in 2022/23, global cotton beginning stocks will be 20.373 million tons, production will be 24.985 million tons, total supply will be 45.357 million tons, consumption will be 25.299 million tons, exports will be 9.546 million tons, and ending stocks will be 20.058 million tons. The Kotruk A index for 2022/23 is 99-150 cents/pound, with the middle price being 121 cents/pound.
U.S. cotton production – The U.S. cotton production report released by the U.S. Department of Agriculture on October 3 shows that as of October 2, 2022, the progress of U.S. cotton spinning was 77%, an increase of 10 percentage points from the previous week. , an increase of 8 percentage points from the same period last year and an increase of 4 percentage points from the average of the past five years. The U.S. cotton harvest progress is 22%, an increase of 7 percentage points from the previous week, an increase of 9 percentage points from the same period last year, and an increase of 5 percentage points from the average of the past five years. The growth status of US cotton reached good or above, accounting for 31%, which was the same as the previous week and a decrease of 31 percentage points from the same period last year. The proportion of unvaccinated vaccines in Texas was 69%, an increase of 8 percentage points from the previous week.
U.S. Cotton Exports – The U.S. Department of Agriculture report shows that from September 23 to 29, 2022, the net contract volume of U.S. upland cotton in the 2022/23 season was 27,500 tons, a significant increase from the 6,849 tons in the previous week. , a total of 38,500 tons were signed for this year and next year, compared with 16,600 tons last week. U.S. cotton shipments were 48,200 tons, up from 42,800 tons the previous week. There were previous market rumors about a large number of cancellations of US cotton contracts, but the actual number of cancellations last week was only 5,300 tons, which was roughly the same as the previous week.
India – During the National Day, the export price of Indian cotton yarn fell sharply, mainly affected by the sharp fall in domestic cotton prices and weak overseas demand. With the arrival of Diwali, domestic yarn demand in India has not rebounded, causing domestic cotton yarn prices to fall again, with most varieties falling by 20-35 rupees/kg, or 4-10%.
In the week of National Day, the spot price of S-6 in India continued to fall by 4,500 rupees/kander, a decrease of 6.1%. With the steady increase in the amount of new cotton on the market, India’s domestic cotton prices fell by 20-24% at the end of September compared with the beginning of September. According to foreign reports, India’s cotton production is expected to increase by 15% in 2022/23. This is due to an 8% increase in planting area, good weather and growing environment, and recent rainfall has gradually converged, so cotton yields are expected to increase.
Pakistan – During the National Day, the price of cotton yarn in Pakistan fell, partly due to the current low domestic and foreign cotton prices. That week, Pakistan’s cotton prices continued to decline following ICE futures, with the Karachi spot price index falling by 2,000 rupees per gross, or 9.52%. At present, there is still very little new cotton on the market in Sindh Province. Floods have caused damage to most cotton fields, and commercial activities are far from returning to normal levels.
Due to floods, cotton production has been significantly reduced, and small and medium-sized textile mills in Pakistan are facing closure. Large companies that supply multinationals such as Nike, Adidas, Puma and Target Group have ample inventories and are less affected. While larger companies have been less affected due to ample inventory, smaller factories that export sheets and towels to the United States and Europe have begun to close. The Pakistan Textile Exporters Association said shortage of quality cotton, high fuel costs and insufficient recovery of payments from buyers were the reasons behind the closure of small textile mills.
Keywords:
Cotton Futures Cotton Import and Export
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