The market was up 1.73 c/lb this week with July closing at 61.79 c/lb.
The US jobs numbers came in unexpectedly positive on Friday as they announced 2.5 million jobs were added in May, unemployment there is now at 13% which still remains historically high.
In Indian local ginners and traders continue to sell at aggressive prices, with 40k MT of business reported over the last 10 days to China and Bangladesh. The CCI continues to seek a high price for their nearly 2 million MT stocks but no business done except for local ginners.
Pakistan is reporting poor germination in some areas as well as continued fears over locusts. If the locust issue persists into end of July time then it should have an effect on the local crop. In India the MSP has been increased by 5% for next year meaning the Indian farmer will receive anywhere between 75 c/lb and 80 c/lb ex gin, based on the current market and currency level. This should incentivize plantings and we believe a crop of 36 million bales is again possible there.
In the US the next acreage report is at the end of this month but with some dry weather in the US, there is the possibility that the acreage will be reduced to as low as 12 million acres. If this is the case then we could be looking at a crop of 18 to 19 million bales for new crop, not a drastic drop in production there but certainly noteworthy. Meanwhile, the US sales dropped hugely over the week as China remained mostly absent. The Chinese authorities did request local buyers to slow down US AG purchases last week and this has perhaps filtered through.
At origin in West Africa successful tenders have taken place with surprisingly strong prices paid though not at the basis of pre pandemic levels.
We are starting to see a touch more enquiry for cotton from Bangladesh and Pakistan, though it is still very slow. The market remains strong thanks to the continued government support programs and thanks to the easing of lockdowns in Europe and the US. We still believe there is a divergence between values on NYF and the physical price willing to be paid for cotton. At some point the market will correct this
Πηγή: Mambo