fbpx

COTTON PRICES REBOUNDED AMID IMPROVED SENTIMENT & LOWER OUTPUT

Harvest Global Markets :

US Cotton prices rebounded after hitting two year’s low in October caused by improving sentiment amid lower output. While rebalancing of cotton supply crunch & dropped in demand adjusted the prices to normalization.

ICE (Intercontinental Exchange Cotton Contract) settled at 81.16 cents / lbs as of 21th November, 2022. The contract hit with December futures up by 2.6% a month earlier. However, Cotton futures plunged to $72.11 in the late October due to dropped in global demand amid fear of recession (Lowest price since 27 December, 2020).

In early November, China eased its Zero-Covid policy and executed reduction in the number of quarantine days, supported cotton prices to go up with strong consumer demand in the world’s largest cotton yarn importer. China is also considering as the largest consumer of cotton having one-third cotton mill usage.

According to data from the US Department of Agriculture (USDA), China is the world’s largest cotton yarn importer and a major driver of cotton prices. Chinese spinning mills do not produce enough yarn for the production of fabric. Amid lower Chinese imports, USDA forecast world cotton lint consumption could fall to 114.9 million bales in the marketing year of 2022/23, down 2.4 million from the previous year. Since 2014 the value of U.S. cropland had hovered around $4,000 per acre, that was up until 2021 when things changed.

Global cotton production fell to 116.4 million bales in October, down 1.6 million bales from the previous month, USDA data showed. This was driven by lower output in Pakistan, which saw production fall for the third consecutive months as a result of the deadly floods in June and July.

 

Share this post

LATEST POSTS