A relatively quiet week on prices with a late rally towards the end settling at 67.17 c/lb on March, up 117 pts in the week.
On Thursday President Trump tweeted that a deal with China was very close, thwarting the possibility of increased tariffs kicking in on Sunday. The news is still not confirmed by both parties, but it does seem that a deal of sorts has been reached with an announcement and potential signing due to take place on Friday. The market immediately rallied on the news. Boris Johnson also won a majority election in the UK, and should now be able to take Britain out of Europe backed by that majority in parliament.
Demand wise, both Bangladesh and Pakistan have been actively enquiring for nearby shipments. Bangladesh has been looking for WAF nearby and Pakistan looking for cheaper options. Indian cotton remains cheap at around 72.50 c/lb CIF Far East. We still feel that Bangladesh have a lot of WAF coverage to do as they become more of a hand to mouth buyer than what we have seen in the past.
The WASDE report showed lower production and consumption numbers. Production was reduced in the US to and Pakistan but were offset by a larger production in the Brazil. The consumption decrease came in China where the trade war is starting to bite and effect their textile exports.
In India the CCI have again been aggressive, averaging 90k bales bought per day mostly in the South. Predictions that the CCI will buy between 5 to 10 million bales remain.
We have now broken out of the 64 to 66 c/lb range we had come accustomed to. The question is how long will we stay here. With a signed trade deal and tariffs rolled back then a move into the 70’s is possible, though with big crops to come from West Africa and the US, the move upwards in prices will have some hurdles we believe.
Πηγή: Mambo