Vietnam expected to remain worldΆs fastest growing cotton consuming country, FAS post says. Imports estimated at a record 5.05 million bales, up 10% from 2015-16.
Cotton futures settled little changed in another lightly traded session Wednesday, stuck in the tightest trading range in a long while.
March closed up a point at 69.75 cents, trading within a 40-point span from 70 to 69.60 cents. May eased off two points to close at 70.15 cents, while December 2017 edged up nine points to finish at 68.95 cents.
Volume slipped to an estimated 10,918 lots from 11,556 lots the previous session when spreads accounted for 3,647 lots or 32% and EFP 65 lots. Options volume totaled 1,767 calls and 595 puts.
Vietnam, which relies heavily on imported cotton to feed its spinning industry, is likely to remain the worldΆs fastest growing cotton consuming country because of several factors, according to a U.S. agricultural attach report.
Those factors include reaping the benefits of different sources, increasing cotton yarn imports by international markets — especially from China, Turkey and South Korea — and taking advantage of opportunities offered by a series of free trade agreements with trading partners.
Cotton consumption there has increased at an average rate of 22% per year for the last five years, the Foreign Agricultural Service report said. The USDA earlier this month estimated VietnamΆs 2016-17 cotton mill use at 4.9 million bales, up 20% from two years ago.
Vietnam now ranks among the worldΆs top five textile and apparel-exporting countries. Its five leading cotton suppliers include the United States, India, Brazil, Australia and Cote dΆIvoire, which have made up 70% to 80% of its total cotton supplies.
Vietnam cotton buyers are looking for other suppliers, including Argentina and other African countries, the report said. However, evidence suggests that import quantity still is negligible from other suppliers.
As the textile sector grows, the country will continue to import more cotton in the short to medium term, the post said. The post estimated VietnamΆs 2016-17 imports at a new record of 5.05 million statistical 480-pound bales, up 10% from 2015-16.
Record imports of 4.58 million bales last season were valued at $1.56 billion, an increase of 7% in quantity and 1% in value over the previous marketing year, the report said.
Vietnam is the top foreign buyer of U.S. cotton this season, having purchased 1.388 million bales or 16% of 2016-17 export sales through Dec. 15. Others among the leading five buyers included China, 1.266 million bales; Mexico, 966,000 bales; Indonesia, 767,000; and Turkey, 681,000.
Futures open interest fell 1,247 lots to 243,809, with MarchΆs down 1,693 lots to 163,319 and MayΆs down 157 lots to 41,158. Certified stocks were unchanged at 40,562 bales.
