The Spot Rate Committee of the Karachi Cotton Association (KCA) reduced the spot rate of cotton of the new crop of cotton 2024-25 by Rs700 per maund to Rs 19,000 per maund. The local cotton market remained bearish and the trading volume remained low. The rate of new cotton in Sindh is in between Rs 18,500 to Rs 19,500 per maund. The rate of Phutti in Sindh is between Rs 8,000 to Rs 9,000 per 40 kg. The rate of cotton in Punjab is in between Rs 20,000 to Rs 20,500 per maund. The rate of Phutti in Punjab is between Rs 9,000 to Rs 9,200 per 40 kg. 3400 bales of Tando Adam were sold at Rs 19,000 to Rs 19,400 per maund, 100 bales of Burewala were sold at Rs 21,000 per maund and 200 bales of Chichawatni were sold at Rs 21,000 per maund.
Elsewhere in the world cotton rates in top ten cotton producing countries varied. The retail price range for Argentina cotton is between US$ 1.21 and US$ 1.25 per kilogram or between US$ 0.55 and US$ 0.57 per pound(lb). The retail price range in Argentine Peso for cotton is between ARS 281.73 and ARS 290.75 per kilogram or between ARS 127.77 and ARS 131.86 per pound(lb) in Buenos Aires and Cordoba. In Australia cotton was traded at $616.7/bale (Cotlook ‘A’ Index) Down by 3 percent. NSW is expected to harvest more cotton than last season, with production estimated to rise by 4pc to 761,000 tonnes due to good yields.
The retail price range for Brazil cotton is between US$ 1.59 and US$ 1.67 per kilogram or between US$ 0.72 and US$ 0.76 per pound(lb). The retail price range in Brazilian Real for cotton is between BRL 7.93 and BRL 8.37 per kilogram or between BRL 3.60 and BRL 3.80 per pound(lb) in Brasilia and Rio de Janeiro. The retail price range for China cotton is between US$ 0.74 and US$ 0.86 per kilogram or between US$ 0.33 and US$ 0.39 per pound(lb). The retail price range in Yuan Renminbi for cotton is between CNY 5.17 and CNY 6.05 per kilogram or between CNY 2.34 and CNY 2.74 per pound(lb) in Beijing and Shanghai.
The retail price range for Kazakhstan cotton is between US$ 0.75 and US$ 1.19 per kilogram or between US$ 0.34 and US$ 0.54 per pound(lb). The retail price range in Tenge for cotton is between KZT 336.69 and KZT 532.74 per kilogram or between KZT 152.69 and KZT 241.60 per pound(lb) in Nur-Sultan and Almaty. The retail price range for Uzbekistan cotton is between US$ 0.49 and US$ 0.89 per kilogram or between US$ 0.22 and US$ 0.40 per pound(lb). The retail price range in Uzbekistan Sum for cotton is between UZS 6,148.75 and UZS 11,067.75 per kilogram or between UZS 2,788.55 and UZS 5,019.39 per pound(lb) in Tashkent and Samarkand. The retail price range for Mali cotton seeds is between US$ 0.64 and US$ 0.81 per kilogram or between US$ 0.29 and US$ 0.37 per pound(lb). The retail price range in CFA Franc BCEAO for cotton seeds is between XOF 390.11 and XOF 494.92 per kilogram or between XOF 176.92 and XOF 224.45 per pound(lb) in Bamako and Sikasso.
The retail price range for Turkey cotton is between US$ 2.41 and US$ 3.61 per kilogram or between US$ 1.09 and US$ 1.64 per pound(lb). The retail price range in Turkish Lira for cotton is between TRY 47.72 and TRY 71.58 per kilogram or between TRY 21.64 and TRY 32.46 per pound(lb) in Ankara and Istanbul. The retail price range for India cotton is between US$ 0.58 and US$ 1.27 per kilogram or between US$ 0.27 and US$ 0.57 per pound(lb). The retail price range in Indian Rupee for cotton is between INR 48.45 and INR 104.98 per kilogram or between INR 21.97 and INR 47.61 per pound(lb) in New Delhi and Mumbai. The retail price range for US cotton is between US$ 3.92 and US$ 6.86 per kilogram or between US$ 1.78 and US$ 3.11 per pound(lb). The retail price range in Euro for cotton is between EUR 3.60 and EUR 6.29 per kilogram or between EUR 1.63 and EUR 2.85 per pound(lb) in Washington and New York.
Indian cotton traders benefited from the delay in the arrival of shipments from US, Brazil, that triggered demand for Indian natural fibre from mills in neighbouring Bangladesh. India’s cotton exports for the 2023-24 season, ending in September, are projected to increase by over two-thirds due to rising demand from mills in Bangladesh. The Cotton Association of India (CAI) expects shipments to reach around 26 lakh bales (of 170 kg each) — a 67.7 per cent increase from the previous season’s 15.5 lakh bales.
In Brazil the cotton harvest in Brazil has started with 1.34 percent of the area picked so far. Estimates of total acreage and production volume for the 2024 crop are maintained. In May, Brazil exported 229,000 tonnes of cotton – 280% more than in May/23. In total, Brazilian exports reached 2.3 million tonnes, an all-time record. There are still two months to go until the end of the 2023/24 marketing year. According to Abrapa, the area planted to cotton in Brazil is expected to reach 1.935 million hectaresfor the 2024 crop. As a result, production is expected to reach 3.5 million tonnes of cotton. If confirmed, this will represent an increase of 7.7% compared to the volume harvested in the previous season.
An interesting development in May was that for the first time this market year, China lost its top position in terms of imports of Brazilian cotton. In May, Turkey took 45.8 thousand tonnes (29% of the monthly total). Following Turkey came Vietnam (43.9 thousand tonnes; 20%) and Bangladesh (34.2 thousand tonnes; 14%). However, in the 2023/24 market year, China is the country that has purchased the most Brazilian cotton. From Aug/23 to May/24, they purchased 1.25 million tonnes which corresponds to 53% of the total. After China come Vietnam (326 thousand tonnes; 14%) and Bangladesh (245 thousand tonnes; 10%)
From Aug/23 to May/24, Brazil exported 2.3 million tonnes of cotton – 78.7% above that recorded in the same period of 2022/23. This volume is a historic record and generated revenues of US$4.2 billion.
In the United States cotton futures continued to slide on a looser balance sheet for June and rains in the Southwest. Since last week’s close, July futures gave up 409 points, settling at 71.35 cents per pound. The decline is primarily due to the contract’s liquidation as First Notice Day approaches. December struggled throughout the week but recouped some of the losses on Thursday. December futures settled at 71.79 cents per pound, 181 points lower than last week. In addition to the slightly bearish WASDE and favorable rains, price pressure came from speculators rolling positions forward. Prices found support towards the end of the week on robust export sales. Daily volume traded remained strong this week. Total open interest decreased from 13,319 contracts to 218,520. Bales eligible for delivery against futures increased by 8,063 bales, bringing certificated stock to 137,209 bales.
The Fed held interest rates steady at the June Federal Open Markets Committee (FOMC) meeting and is now projecting one rate cut for 2024. For the second week, the NASDAQ and S&P 500 reached all-time highs. The Dow Jones, however, fell four out of five sessions. The May U.S. Consumer Price Index (CPI) rose 3.3% from last year, slower than the expected 3.4%. The reading was flat month-over-month. The softer-than-expected report signals that inflation pressure is moderating, helping push stocks to new highs. The U.S. Producer Price Index (PPI) fell 0.2% since May, another signal that price pressure is easing. Since last year, producer prices rose 2.2%, which was below the 2.5% expected. The U.S. Dollar regained ground after falling on the better-than-expected inflation news.
The release of the World Agricultural Supply and Demand Estimates (WASDE) loosened the current and new crop balance sheets. The U.S. balance sheet for 2023/24 underwent a few changes, but one significant change was the reduction of 500,000 bales to 11.8 million bales for U.S. exports. This caused ending stocks to increase from 2.4 million bales to 2.85 million bales. For 2024/25, U.S. ending stocks increased by 400,000 bales to 4.1 million bales. A notable change on the World balance sheet for 2023/24 was the rise in Brazilian exports. Exports from that country increased by 300,000 to 12.4 million bales, which means Brazil has surpassed the U.S. as the top exporter of cotton in the world.
The trend of the past few weeks continued when the U.S. Export Sales Report held another week of good sales but lagging shipments. U.S. exporters sold 177,100 Upland bales for the current crop year and netted 177,400 bales for the new crop year. Shipments of 186,600 bales have increased compared to recent weeks but are still below the approximate 200,000 bales needed per week to reach the updated 11.8 million bale export estimate. Total bales exported as a percent of the final crop are still below average for this point in the year. A net total of 3,700 Pima bales were sold, and an impressive 9,000 bales were shipped. Throughout the country, 80% of the expected cotton acreage has been planted, and 14% is now squaring. For the U.S., the amount of cotton rated good to excellent decreased from 61% to 56%.
Most final plant dates have passed in the Southwest, and there is only a week until the last date for the Rolling Plains and Oklahoma passes. In the past week, West Texas, Oklahoma, and Kansas have received rainfall, which delayed some producers from getting in the field. Clearer skies and heat should help speed things along in West Texas this week. Crop development has been progressing in South Texas. While some areas would benefit from a good rain, others have received too much rain. A tropical depression could develop in the southwestern portion of the Gulf of Mexico, which would bring rain to the region.