All commodity markets are in turmoil, starting with gold. The most unproductive investment is flying from record to record, against a backdrop of war and the hope of a safe investment to put under one's mattress for a rainy day!
And yet, despite the increasingly anxiety-provoking news day after day, do we really need to resolve to enter a war economy? If you look at the performance of the United States, you'll know that a proactive, aggressive policy can help put this feeling into perspective. Week after week, the USA publishes ever more encouraging figures, while at the same time China seems to be sinking into a crisis that could be long-lasting without a change of direction.
Yet the world has become accustomed to the sound of cannon fire, and it is now accepted that Ukraine can lose, and that if Hamas were to release the last hostages, the war would end. The inanity of the UN and its Secretary General is a daily reminder that this body needs a structure adapted to new international realities.
The cotton market recovered well over the past week, climbing back above 80 usc/lb, its new equilibrium point, despite the rise in the dollar. Yet textile demand remains limited. So how can we explain this movement?
- - The decline in inventories, confirmed by the latest WASDE report, as well as a slight drop in production.
- - The fact that US production is low, even though the financial market is American and only concerns US cotton.
- - A cost price that has undergone strong inflation among the largest producers.
- - Port congestion in Brazil
- - But above all, the difficulty of finding good quality cotton to sell on any continent, particularly in Latin America and Europe, is pushing all the fundamentals upwards. In our opinion, this trend is set to continue and even intensify.
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This is the last report for 2023, a year marked by war and inflation. Let's hope that the new epidemic in China is not the beginning of a new pandemic, and that 2024 will bring us a new breath of fresh air.
Πηγή: Mambo