Despite struggling to sustain production due to high power rates the spinning industry is starved of cotton which has resulted in increase in cotton prices in the country. The spot rate by of Karachi Cotton Association (KCA) Rs 100 per maund to close at Rs 17,800 per maund.
All surveys by the government and private sector indicate that the cotton crop this year will be much better than last year. Last year the crop size was less than half million bales. This year the experts expect it to double. In fact because of expected higher production the rates of Phutti remained below the government support price of Rs850 per 40kg after which the Trading Corporation of Pakistan intervened and started procuring crops directly from the farmers. The rates of Phutti have improved both in Punjab and Sindh. In fact the Punjab Minister of Commerce and Trade S M Tanveer told media that there are reports that at some places farmers are getting Rs9000 per 40 kg in Punjab.
During the past week the local cotton market remained firm and the trading volume remained satisfactory. The rate of new crop of cotton in Sindh is in between Rs 17,800 to Rs 18,000 per maund. The rate of Phutti in Sindh was still between Rs 7,300 to Rs 8,000 per 40 kg.
In Punjab, the rate of cotton was much higher as the quality of the crop was better because most of the farmers used sustainable production techniques. The crop size is also much higher. The cotton rates in Punjab ranged between Rs 17,900 to Rs 18,400 per maund and the rate of Phutti was between Rs 7,600 to Rs 9,000 per 40 kg. The rate of cotton in Balochistan which produces the best quality of cotton in the country was lower than in Punjab ranging between Rs 17,800 to Rs 17,900 per maund while the rate of Phutti is between Rs 8,000 to Rs 8,500 per 40 kg. This is perhaps because there are no textile units near the cotton growing area of the province and the millers discount the higher transportation cost from the prices they offer.
On the sales side there was satisfactory on Thursday as 600 bales of Mehrab Pur were sold in between Rs 17,800 to Rs 17,900 per maund, 200 bales of Chowdagi were sold at Rs 17,950 per maund, 800 bales of Sarkand were sold at Rs 17,800 to Rs 17,850 per maund, 600 bales of Saleh Pat were sold at Rs 17,750 to Rs 17,800 per maund, 2200 bales of Shahdad Pur were sold at Rs 17,900 to Rs 17,950 per maund, 1200 bales of Mir Pur Khas, 600 bales of Sarhari were sold at Rs 17,800 per maund, 1800 bales of Sanghar were sold at Rs 17,600 to Rs 17,900 per maund, 2400 bales of Tando Adam were sold at Rs 17,750 to Rs 18,000 per maund,600 bales of Khanewal, 200 bales of Mian Channu were sold at Rs 18,500 per maund, 800 bales of Vehari were sold in between Rs 18,250 to Rs 18,300 per maund, 800 bales of Haroonabad were sold at Rs 18,100 to Rs 18,300 per maund, 600 bales of Faqeer Wali were sold at Rs 18,100 to Rs 18,200 per maund, 800 bales of Hasil Pur were sold at Rs 17,900 to Rs 18,050 per maund, 800 bales of Burewala were sold at Rs 18,050 per maund, 1400 bales of Chichawatni were sold at Rs 18,050 to Rs 18,200 per maund and 400 bales of Winder were sold at Rs 17,700 per maund.
In the United States deteriorating crop conditions were noticed in Texas. On the export side, weak shipments were reported during the week. December futures traded in a two-sided fashion, struggling to find direction throughout the week. The cotton market faced macro headwinds much of the week, but prices eventually recovered to finish higher. Overall, it was a pretty quiet week for the market, with much of the activity happening when speculative traders hit technical buying or selling points. The market found support from continued worries about the condition of the Texas crop and the commencement of Chinese Reserve sales.
The market managed to shake off weak export sales to finish basically unchanged for the week. For the week, December futures finished at 84.70 cents per pound, up 32 points from the week prior. Overall volume continues to rise, and total open interest increased 6,784 contracts to 209,756.
Major indexes closed out the month of July with overall gains, but so far August has been a different story with mixed economic news keeping stocks trading back and forth. The Personal Consumption Expenditure (PCE), which is the Fed’s biggest gauge for inflation, rose 3% year-over-year. While this was less than expected and stocks increased from the news, it still shows rising prices and elevated inflation. Major indexes came under pressure when Fitch Rating Service downgraded the U.S. credit rating. Although the news caused stocks to retreat, the U.S. Dollar responded by strengthening against major currencies. A continued production cut announced by Saudi Arabia sent crude oil prices up, which helped bolster cotton prices at the end of the week.
With the new marketing year beginning this week, it was no surprise to see net reductions for the 2022/23 crop year. Many traders are wrapping up positions or rolling sales to the 2023/24 crop year, and as expected, sales were short the week ending July 27. For the 2022/23 crop year, net reductions of 9,900 Upland bales were reported. Sales for the 2023/24 crop year were also weak for what is typical at this point in the year. A net total of 33,900 Upland bales were booked, showing that mills were not in the market with last week’s higher prices. Shipments were disappointing as well. A total of 194,600 bales were exported, meaning USDA will likely lower the 12.9 million bale estimate 2022/23 export number on next week’s World Agricultural Supply and Demand Estimates (WASDE) report. There was no Pima cotton sold for the current marketing year, but 1,700 bales were booked for the next marketing year. Shipments for Pima were also down from last week, with 1,200 bales shipped.
The narrative has not changed when talking about excessively hot temperatures across the Southwest. Worries of heat stress might have helped boost the market, but the crop has not been as lucky. Rains and seasonable temperatures are desperately needed in the coming weeks, but the high temperatures and dry weather are set to continue. The hotter weather and open skies in South Texas; however, have allowed harvest to proceed without interruption. The deteriorating condition of the Texas crop was noticeable in this week’s Crop Progress and Condition report.
The final export sales report for 2022/23 will be watched closely next Thursday to see if the export estimate on Friday’s WASDE release needs to be revised after recent slow shipments. After that, the only other major news expected next week will be Friday’s WASDE report, which coincides with the first NASS production estimate for this season and the first look at certified acreage from the FSA.
All surveys by the government and private sector indicate that the cotton crop this year will be much better than last year. Last year the crop size was less than half million bales. This year the experts expect it to double. In fact because of expected higher production the rates of Phutti remained below the government support price of Rs850 per 40kg after which the Trading Corporation of Pakistan intervened and started procuring crops directly from the farmers. The rates of Phutti have improved both in Punjab and Sindh. In fact the Punjab Minister of Commerce and Trade S M Tanveer told media that there are reports that at some places farmers are getting Rs9000 per 40 kg in Punjab.
During the past week the local cotton market remained firm and the trading volume remained satisfactory. The rate of new crop of cotton in Sindh is in between Rs 17,800 to Rs 18,000 per maund. The rate of Phutti in Sindh was still between Rs 7,300 to Rs 8,000 per 40 kg.
In Punjab, the rate of cotton was much higher as the quality of the crop was better because most of the farmers used sustainable production techniques. The crop size is also much higher. The cotton rates in Punjab ranged between Rs 17,900 to Rs 18,400 per maund and the rate of Phutti was between Rs 7,600 to Rs 9,000 per 40 kg. The rate of cotton in Balochistan which produces the best quality of cotton in the country was lower than in Punjab ranging between Rs 17,800 to Rs 17,900 per maund while the rate of Phutti is between Rs 8,000 to Rs 8,500 per 40 kg. This is perhaps because there are no textile units near the cotton growing area of the province and the millers discount the higher transportation cost from the prices they offer.
On the sales side there was satisfactory on Thursday as 600 bales of Mehrab Pur were sold in between Rs 17,800 to Rs 17,900 per maund, 200 bales of Chowdagi were sold at Rs 17,950 per maund, 800 bales of Sarkand were sold at Rs 17,800 to Rs 17,850 per maund, 600 bales of Saleh Pat were sold at Rs 17,750 to Rs 17,800 per maund, 2200 bales of Shahdad Pur were sold at Rs 17,900 to Rs 17,950 per maund, 1200 bales of Mir Pur Khas, 600 bales of Sarhari were sold at Rs 17,800 per maund, 1800 bales of Sanghar were sold at Rs 17,600 to Rs 17,900 per maund, 2400 bales of Tando Adam were sold at Rs 17,750 to Rs 18,000 per maund,600 bales of Khanewal, 200 bales of Mian Channu were sold at Rs 18,500 per maund, 800 bales of Vehari were sold in between Rs 18,250 to Rs 18,300 per maund, 800 bales of Haroonabad were sold at Rs 18,100 to Rs 18,300 per maund, 600 bales of Faqeer Wali were sold at Rs 18,100 to Rs 18,200 per maund, 800 bales of Hasil Pur were sold at Rs 17,900 to Rs 18,050 per maund, 800 bales of Burewala were sold at Rs 18,050 per maund, 1400 bales of Chichawatni were sold at Rs 18,050 to Rs 18,200 per maund and 400 bales of Winder were sold at Rs 17,700 per maund.
In the United States deteriorating crop conditions were noticed in Texas. On the export side, weak shipments were reported during the week. December futures traded in a two-sided fashion, struggling to find direction throughout the week. The cotton market faced macro headwinds much of the week, but prices eventually recovered to finish higher. Overall, it was a pretty quiet week for the market, with much of the activity happening when speculative traders hit technical buying or selling points. The market found support from continued worries about the condition of the Texas crop and the commencement of Chinese Reserve sales.
The market managed to shake off weak export sales to finish basically unchanged for the week. For the week, December futures finished at 84.70 cents per pound, up 32 points from the week prior. Overall volume continues to rise, and total open interest increased 6,784 contracts to 209,756.
Major indexes closed out the month of July with overall gains, but so far August has been a different story with mixed economic news keeping stocks trading back and forth. The Personal Consumption Expenditure (PCE), which is the Fed’s biggest gauge for inflation, rose 3% year-over-year. While this was less than expected and stocks increased from the news, it still shows rising prices and elevated inflation. Major indexes came under pressure when Fitch Rating Service downgraded the U.S. credit rating. Although the news caused stocks to retreat, the U.S. Dollar responded by strengthening against major currencies. A continued production cut announced by Saudi Arabia sent crude oil prices up, which helped bolster cotton prices at the end of the week.
With the new marketing year beginning this week, it was no surprise to see net reductions for the 2022/23 crop year. Many traders are wrapping up positions or rolling sales to the 2023/24 crop year, and as expected, sales were short the week ending July 27. For the 2022/23 crop year, net reductions of 9,900 Upland bales were reported. Sales for the 2023/24 crop year were also weak for what is typical at this point in the year. A net total of 33,900 Upland bales were booked, showing that mills were not in the market with last week’s higher prices. Shipments were disappointing as well. A total of 194,600 bales were exported, meaning USDA will likely lower the 12.9 million bale estimate 2022/23 export number on next week’s World Agricultural Supply and Demand Estimates (WASDE) report. There was no Pima cotton sold for the current marketing year, but 1,700 bales were booked for the next marketing year. Shipments for Pima were also down from last week, with 1,200 bales shipped.
The narrative has not changed when talking about excessively hot temperatures across the Southwest. Worries of heat stress might have helped boost the market, but the crop has not been as lucky. Rains and seasonable temperatures are desperately needed in the coming weeks, but the high temperatures and dry weather are set to continue. The hotter weather and open skies in South Texas; however, have allowed harvest to proceed without interruption. The deteriorating condition of the Texas crop was noticeable in this week’s Crop Progress and Condition report.
The final export sales report for 2022/23 will be watched closely next Thursday to see if the export estimate on Friday’s WASDE release needs to be revised after recent slow shipments. After that, the only other major news expected next week will be Friday’s WASDE report, which coincides with the first NASS production estimate for this season and the first look at certified acreage from the FSA.