Home / Knowledge / News / Textiles / 'Christmas mood' - small gains in NY cotton market
'Christmas mood' - small gains in NY cotton market
24
Dec '11
Plexus Cotton Limited reports that New York futures went nowhere this week in thin pre-holiday trading, as March edged up 95 points to close at 87.24 cents.

A look at the daily trading volume says it all, as the highest turnover amounted to just 9'136 contracts. Interestingly though, many of the traders that were active added new bets, because open interest increased by around 4'000 contracts since last Thursday. Obviously there are still some traders seeking protection against further declines, but there are also some new longs entering the market.

The Chinese Reserve continued its support by taking yet another 1.0 million statistical bales of domestic cotton into its stockpile, bringing the total amount to 8.2 million bales, not counting an estimated 4.5 million bales of imports. Many observers now feel that the Reserve will lift as many as 18.0 million bales of domestic and imported cotton off the market, which would be more than the global production surplus this season.

Late last week the Chinese Ministry of Finance also announced a new formula for its sliding scale duty in 2012. It raises the threshold at which a fixed rate duty is charged from around 81 cents/lb to 100 cents/lb and increases the sliding scale duty rate below this threshold. On balance this new structure is seen as slightly supportive, because it levies a heavier tax on cheaper imports compared to 2011. So far no sliding scale import quotas have been issued, but we expect that to happen early next year.

It is not just China that is trying to support prices. The government of Pakistan is apparently intending to buy 1 million bales (of 375 lbs each) through the TCP (Trading Corporation of Pakistan) in order to help out growers and ginners. However, while the Prime Minister seems to have already instructed the Secretary of Finance to arrange the funding for such an operation, mill owners and exporters are voicing their discontent and it may therefore be a while before a final decision is reached.

While the cotton market didn't provide a lot of excitement this week, there was a lot happening on the monetary front, as banks in Europe received an early Christmas present from the European Central Bank (ECB) two days ago. In order to preempt another liquidity crisis, the ECB offered an open-ended amount of very cheap 3-year loans to European banks.

Over 500 banks jumped at this too-good-to-refuse deal, engaging in loans of around USD 636 billion, although 'only' about USD 270 billion will be net new loans, while the balance refinances existing debt, albeit at a cheaper rate and with a longer maturity.

This aggressive move by the ECB is tantamount to money printing, because these new loans the ECB is extending to the banking system are created out of thin air. Although this money is a lifeline for the banks, it doesn't solve the fundamental issues, like the escalating debt bubble and massive unrecognized losses in the financial system. There is also an interesting political twist to this.

Must ReadView All

Courtesy: Applied DNA Sciences

Apparel/Garments | On 24th Feb 2017

SigNatureT DNA can help prevent apparel counterfeiting

SigNatureT DNA is forensic molecular tag by Applied DNA Sciences...

Textiles | On 24th Feb 2017

Pakistan's textile exports down 1.54% in July-Jan FY17

The value of textile and garment exports made by Pakistan decreased...

Courtesy: The Irish News/Christian Cowan (Google)

Fashion | On 24th Feb 2017

Google & Christian Cowan create 'really blue' jeans

Google has partnered with British fashion designer Christian Cowan to ...

Interviews View All

Abhishek Ganguly
Puma India

‘As a brand, Puma is always looking for new and innovative ways to inspire ...

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Abhimanyu Singh Rathore & Barbara Anna Kosiorek
Kannbar

‘Blending cultures is the true beauty of fashion, where one’s imagination...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Steve Cole
Xerium Technologies

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

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Jay Ramrakhiani
Occasions Elegance Wear

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

Ritu Kumar
Label Ritu Kumar

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

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
February 2017

February 2017

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

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search