Home / Knowledge / News / Textiles / NY cotton futures under renewed pressure this week
NY cotton futures under renewed pressure this week
Sep '14
New York cotton futures came under renewed pressure this week, as December dropped 304 points to close at 65.05 cents.

The market was unable to hold on to the impressive gains it posted last week and dropped right back to the middle of a 62.00-68.50 cents range, which has been in effect for about nine weeks now.

Nevertheless, December has so far managed to stay above a short-term uptrend line dating back to August 1, as well as a longer-term downtrend line that originated in early May.

“These two lines crossed just below 64.50 cents on Friday and as long December can stay clear of that level, the bulls have something to hang on to”, says the latest Plexus cotton market report.

Markets don’t like uncertainty and the cotton market has been shrouded in plenty of it lately, which is the reason for this meandering sideways trend for the last two months.

China’s government policy and unpredictable weather are keeping traders on their toes and either of them has the power to unsettle the market.

China finally confirmed what had been rumoured for a while, namely that Xinjiang producers would be receiving a target deficiency payment.

This amounts to the difference between the target price of 19,800 Yuan/ton and an average market price based on data collected between September and November.

At current rates the subsidy would probably exceed 6,000 Yuan/ton (44 cents/lb). Growers in the eastern cotton belt of China are less fortunate, since they will apparently only get a fixed subsidy of 2,000 Yuan/ton (15 cents/lb).

However, it is still not clear how China will proceed on cotton imports, which is the most important factor when it comes to international prices.

According to some sources, the government seems to be quite determined to slow down imports, allowing only the 1% TRQ and some processing quotas from here on.

Mills may even be required to earn their TRQ by buying Xinjiang cotton between now and December, possibly on a ratio scheme.

“This sounds like a clever way to support cash prices and thereby lessen the government’s subsidy burden”, the report says.

The market now fears that Chinese imports may not quite live up to the USDA estimate of 8.0 million bales for the current season, which in turn would lead to higher ROW stocks and depress prices even more.

However, this view may be too pessimistic, since there are still quite a few open quotas around from earlier this year, when mills decided to wait for lower prices.

Between these unused quotas, next year’s TRQ and some additional processing quotas, one may still see imports climb to 8.0 million bales by next July.

Beyond that the pace of Chinese imports may indeed slow down, but the ROW surplus is likely to drop as well since these lower prices should discourage production and stimulate mill use.

Must ReadView All

Textiles | On 27th Oct 2016

Teijin Frontier develops Solotex RC lightweight fibre

Teijin Frontier Co. Ltd, fibre products converting company and part...

Tosha Hays addressing the conference. Courtesy: College of Family and Consumer Sciences, UGA

Textiles | On 27th Oct 2016

Industry experts discuss future of fabrics at UGA

Industry experts, researchers and military officials discussed the...

Courtesy: Global Denim Awards

Fashion | On 27th Oct 2016

Anbasja Blanken & Italian mill ITV Denim win GDA

Dutch designer Anbasja Blanken and Italian mill ITV Denim was the...

Interviews View All

Smita Murarka

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Milind Khandwe
Hindoostan Innovation Centre

‘Modern technical textile is an indispensable tool for science and...

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Ashok Desai
Bombay Textile Research Association

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

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Ritu Kumar
Label Ritu Kumar

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

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

October 2016

October 2016

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


Browse Our Archives


Advanced Search