The market continues to drift in the mid 60’s, settling this week at 66.08 /lb on the March 20 contract.
Globally the market looked at the impeachment proceedings against President Trump, a real risk to his presidency. President Trump also gave a speech on the US economy with traders looking for any signs of news on a US/China trade deal, sadly there was none, and none over the course of the week.
Supply side, the Indian crop remains good, with most predictions at the 37 million bale mark, the question is how much the CCI will buy with estimations ranging from 5 to 10 million local bales. The quality of the early crop has been affected by rains with the most part being SLM styles. An Indian Shankar 6 is offered today at around 72 c/lb CIF, which has fallen over the week due to the weak rupee.
Pakistan has started to slow down their import buying, with total purchases in the region of 2.5 million bales bought over the last two months. They still need to cover another 2.5 million bales which should start again early next year.
Bangladesh is starting to show some light, after improved yarn sales and some strong import figures over the last two months. Still, it has been a poor year in a typically strong import market with the final figure of imports set to be around 6.5 million bales for 2019.
West African origin suppliers have been in the market over the last two weeks for new crop and have achieved some very strong basis levels. We feel that producers still have a lot to sell for new crop as they perhaps wait for a better flat price.
There is a ceiling on the market at around the 66 c/lb with every attempt to pass these levels rejected with short selling and hedging. It needs a trigger to take it through this ceiling which could be sparked by some more positive news on the trade war, which has so far been lacking.
Source: Mambo