Interviews
Textile mills face inflated transportation costs
31 May '08
3 min read
Pima shipments were 11,700 RB. Primary destinations of Upland were China (106,100 RB); Mexico and Indonesia. The primary destinations of Pima shipments were China (3,200 RB); Indonesia and Pakistan.
One reason for lagging shipments is the occurrence of difficulty in obtaining outbound ships as well as rapidly increasing shipping rates that has resulted from the energy crisis. There is little reason to see much improvement in that crisis. Thus, mills will continue to face inflated transportation costs.
This weeks lower prices did bring the international mill community back to the U.S. export market. Export sales should improve over the next month as mills have indicated their stocks are, in many instances, abnormally low. Sales, principally to China, but also to Turkey should improve dramatically in the coming weeks.
Another bearish overtone facing the cotton market was this weeks slippage in all commodity prices; agriculturals, financials and the metals. Too, the value of the U.S. dollar, rallying off record lows, is now in its third week of rallying. This, along with the increased shipping cost has made it difficult for U.S. growths to compete. However, the lower prices experienced will add to the demand base.
With certificated stocks near 1.6 million bales; with 2007-08 U.S. carryover above ten million bales; and with world carryover above sixty million, the market is stuck in a deep vat of mud and syrup.
There is scant upside potential above 68-70 cents for the old crop July. December will trend higher, but only after the July expiry. Just as there is little upside potential for the July contract, there is little downside potential for the December contract.
One reason for lagging shipments is the occurrence of difficulty in obtaining outbound ships as well as rapidly increasing shipping rates that has resulted from the energy crisis. There is little reason to see much improvement in that crisis. Thus, mills will continue to face inflated transportation costs.
This weeks lower prices did bring the international mill community back to the U.S. export market. Export sales should improve over the next month as mills have indicated their stocks are, in many instances, abnormally low. Sales, principally to China, but also to Turkey should improve dramatically in the coming weeks.
Another bearish overtone facing the cotton market was this weeks slippage in all commodity prices; agriculturals, financials and the metals. Too, the value of the U.S. dollar, rallying off record lows, is now in its third week of rallying. This, along with the increased shipping cost has made it difficult for U.S. growths to compete. However, the lower prices experienced will add to the demand base.
With certificated stocks near 1.6 million bales; with 2007-08 U.S. carryover above ten million bales; and with world carryover above sixty million, the market is stuck in a deep vat of mud and syrup.
There is scant upside potential above 68-70 cents for the old crop July. December will trend higher, but only after the July expiry. Just as there is little upside potential for the July contract, there is little downside potential for the December contract.
O.A. Cleveland
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
