Cotton Finishes Marginally Lower

Vietnam reported part of significant changes taking place in global cotton trade, with China being displaced as the largest importer.

U.S. cotton futures settled marginally lower in current-crop deliveries on light volume Tuesday, the fourth losing session in a row.

March closed down seven points to 63.31 cents, a new low finish since Nov. 30 and in the lower quarter of its 97-point range from up 62 points to 64 cents to down 35 points to 63.03 cents. It nudged nine points above MondayΆs high and held five points above MondayΆs low on the downswing.

May also eased off seven points, settling at 64.08 cents, while December 2016 edged up three points to 64.72 cents.

Volume slowed to an estimated 15,577 lots from 18,272 lots the previous session when spreads accounted for 3,742 lots or 20% and EFP 15 lots. Options volume totaled 1,430 calls and 1,119 puts.

Cotton imports in Vietnam, now among the worldΆs top five textile and apparel exporting countries, will continue rising to meet increasing market demand in 2015-16, says a recent U.S. agricultural attach report.

Strong demand for cotton yarns from international markets, especially from China, supports Vietnam to import more cotton to feed its growing spinning sector, the report said.

Imports are estimated by the post to increase in calendar 2015 to about 5.04 million bales, up 45% from last year.

Based on several favorable conditions for its spinning sector, VietnamΆs cotton imports are expected to grow more strongly in coming years, the USDA post said.

The conditions include ChinaΆs increasing imports of cotton yarn and potential opportunities offered by joining the Trans Pacific Partnership and the Free Trade Agreement with the European Union.

The United States is the largest market for the Vietnam textile and garment industry. Vietnam garment exports to the United States reached about $9.8 billion in 2014, 41% of its total export value, and key industry sources estimate the total will climb to about $11 billion in 2015, the report said.

In its latest supply-demand report, USDA raised its forecast of VietnamΆs 2015-15 marketing year imports by 350,000 bales from a month ago to 5.2 million on rapidly rising mill use and new textile investments.

Significant changes are taking place in raw cotton trade around the globe, with China being displaced as the worldΆs leading importer.

The USDA raised BangladeshΆs imports by 200,000 bales on the month to 5.9 million to rank it as the largest importer. The increase was based on strong mill demand and larger recent shipments from India.

ChinaΆs imports were cut 250,000 bales to 5.5 million on declining use and the weak pace of trade to date, while PakistanΆs were boosted 700,000 bales to 2 million on a smaller crop and strong import purchases.

Some veteran cotton analysts expect Vietnam to take over the top importer spot in the next year or two.

Futures open interest fell 1,783 lots Monday to 194,129, with MarchΆs down 2,358 lots to 139,991 and MayΆs up 450 lots to 29,981. Cert stocks increased a single bale to 65,248.