Home / Knowledge / News / Textiles / NY cotton futures drop
NY cotton futures drop
19
Nov '11
Plexus Cotton Limited reports that NY futures ended the week mixed, as December managed to close unchanged at 99.50 cents, while March dropped 240 points to close at 96.48 cents.

For most of the week the market tried to work its way higher in the wake of continued strong buying by the Chinese Reserve and expectations of another strong export sales report. Even though the export numbers didn't disappoint, the session turned into a typical "buy the rumor - sell the fact" affair, with the two front months closing limit down. Most of the blame for today's dismal performance goes to speculators, who once again shied away from commodities due to all the negativity emanating from the European debt crisis.

US export sales of Upland and Pima cotton amounted to 646'800 running bales net, of which China took 630'200 running bales net. In addition to that there were 528'000 bales sold to China under 'optional origin'. Total sales for the season now amount to 9.5 million statistical bales and there are another 1.3 million statistical bales in the 'optional' category. Shipments continue to lag behind though, with only 1.5 million bales exported at this point, which means that the backlog of outstanding commitments has now grown to around 8.0 million bales.

The global cotton situation reminds us of a game of 'musical chairs', with China operating the "on/off" switch. According to the latest USDA figures, the rest of the world (excluding the US) will produce a record crop of 107.6 million bales this season, surpassing the previous mark set in 2006/07 by no less than 7.0 million bales. However, mill demand in the rest of the world is expected to remain stagnant at 110.5 million bales, due to slow economic growth and man-made fiber substitution. As a result the seasonal production gap is expected to drop to just 2.8 million bales, which compares to much larger deficits of 13.3 million bales last season and 26.1 million bales two years ago.

Considering that the rest of the world is nearly self-sufficient, the US has done extremely well by filling its order books to the tune of 9.5 million bales, thanks to the fierce pace of sales earlier in the year, when mills were still fearful that the world would run out of cotton. As a result the US has entered this marketing year with a record 7.5 million bales in carry-in sales. But while the US has made great strides on the export front, its competitors around the globe, such as India, Central Asia, Brazil, Australia and the various African origins, may be left scrambling for a chair to sit on.

This situation is likely to lead to fierce competition among non-US growths, as they try to capture their fair share of this anemic market. Fortunately China has been acting as a stabilizing force by aggressively procuring some of the excess supply, both in the domestic and international markets, otherwise prices would already have come under a lot more pressure. The Chinese Reserve has so far lifted 2.7 million statistical bales in the Chinese market and probably a similar amount overseas. However, the market realizes that this Reserve buying doesn't represent real consumption and that it is the only game in town, which is not very comforting.

Must ReadView All

Textiles | On 22nd Apr 2017

Strong rupee & weak trade to affect textile exporters

Textile and apparel exporters' earnings and EBITDA margins will be...

Textiles | On 22nd Apr 2017

Myntra acquires InLogg

With an aim to strengthen supply chain and logistics, Flipkart-owned...

Textiles | On 22nd Apr 2017

Aditya Birla Group launches new variant Liva Crème

After its successful launch of high quality fabric Liva in 2015,...

Interviews View All

Amardeep Singh
Orient Craft

'In export markets, the trend in terms of embroidery, is towards matte...

Stefan Warnaar
Peak to Plateau

People are willing to pay for quality and performance

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search