Cotton prices have stayed very firm in the past weeks, ahead of a possible new rise of New York futures in the the second part of May. Demand could intensify from India and China, as the two largest cotton users are now turning to the international market for feeding their needs.
Cotton prices have last week remained eventually unchanged in New york, with the new key contract July 19 ending the week down 0.59 cent per lb, or a drop of 0.75%.
New York’s futures have stayed relatively stable in the past week, after rebounding from early February to the end of March.
There are however signs further supporting cotton prices on the international market.
Demand is not only coming from Vietnam and Bangladesh these days but also from the two cotton giants, China and India, both suffering from a cotton deficit this year.
In India, imports are sharply rising from West Africa and the United States.
India has even been the largest buyer of US cotton in the latest available weekly report from the US Department of Agriculture (USDA), ahead of Vietnam, Bangladesh and Turkey.
Demand from China is also expected rebounding after sliding scale quotas have been released by authorities, allowing to import an additional 800,000 metric tons at rather lower tariffs than basic 40%.
The looming end of China-US negotiations could trigger a jump of Chinese demand after Beijing will have consecutively removed its 25% additional tariffs on US cotton imports.
On China’s domestic market, spot prices were this Monday more significantly rising.
The allocation of import quotas could have triggered a delay in national cotton sales to let buyers turn to foreign cotton.
Although inventories have fallen, there is no tight supply situation, apparently.
The main issue lies with the lack of quality cotton in China and in India which could boost average prices on the global market.
Source: Emergingtextiles
