The market lost ground this week to settle at 70.22 c/lb, down 0.47 c/lb.
The market had made gains earlier in the week based on anticipation of the US/China phase one trade deal signing. When the signing did arrive it was more pomp and ceremony rather than any concrete detail on how the AG purchases would be performed and if they would directly involve cotton. The market drifted off thereafter as we now wait for a reaction from China and whether they do indeed start to purchase US cotton.
The US export report was again strong with both sales and shipments at a good rate. Pakistan and Vietnam remain the largest buyers of US cotton, but will we perhaps see China appearing on that list after the recent trade war truce.
Demand and enquiry remains in Bangladesh, Vietnam and Pakistan. Indian Cotton continues to be the most attractive with offers ranging from 75 to 78 c/lb CIF over the week with reports of large quantities of Indian being sold into China again over the last few days.
Pakistan still needs to cover around 1.5 million bales to cover their shorter crop. The CCI in India has bought close to 4 million bales so far and with exports from India advancing at a good rate we feel that there should be another import window in India, perhaps beginning in April time.
Although a good volume of cotton remains in the pipeline, primarily from West Africa and the US, we do see a continued uptick in enquiry which could help strengthen prices. There is also the possibility that China could step in and buy volumes of US cotton in order to adhere to the terms of the signed phase one deal, which would also be supportive.
Πηγή: Mambo