The market has again moved higher in the week to settle at 67.58 c/lb up 41 points.
Despite the phase one trade war agreement it did not perhaps push the market up as strongly as might have been expected due to the uncertainty of the makeup of ag commodities china will be committed to. At this stage the volume of cotton to be involved is unknown. The market has however been stronger this week as traders believe there could be a further reduction in the US crop in the next WASDE report and export sales continue at a reasonable pace as evidenced by the report yesterday.
Demand has once again been slightly more active with Vietnam, Bangladesh, China and Pakistan all showing interest for nearby shipments. We feel that Bangladesh still has quite a lot of WAF new crop coverage to make, however buyers are waiting for a fall NYF which has not been coming so far. The higher market and the positive sentiment on the trade war has allowed for more yarn sales, which in turn has brought more demand for cotton. Long may that continue.
In India the quality concerns continue, particularly in the south where mills have stated that quality is too low for them to consume so will have to go for export. Meanwhile CCI continues to procure cotton and have bought in the region of 1.5 to 2 million bales to date.
The market has managed to stay above the 67 c/lb level over the last few sessions and with more demand and a potentially smaller crop in the US we are friendlier to prices as we go into the New Year. The details to be released on the phase one trade deal could be a pivotal moment for the market and decide the trend for 2020
Πηγή: Mambo