Cotton didn’t wait for peace to plummet sharply. It must be said that the outlook is radically different depending on whether one is a producer, a trader, or a spinner: 

• - For producers, it is above all a disappointment following the meeting between the Chinese and American presidents, which failed to materialize hopes for new quotas in China. On the other hand, rising production costs continue to be a concern. Indeed, the reopening of the Strait of Hormuz will not allow for the replenishment of diesel and fertilizer stocks for several months at best. 
• - For traders, the situation is more nuanced. Anticipating lower yields due to input costs and a very severe El Niño, they note a decline in inventories that is conducive to a significant rise in prices. In this regard, the latest USDA report is significant: The volume of exports for this season—but especially for the next one— against a backdrop of significantly high shipments is a clear sign. If we take into account the volume of cotton decertified by the ICE, we get a more “attractive” picture of our market. 
• - On the spinning side, the situation is more nuanced. Manufacturers are hesitant to buy for fear that the market will collapse again, dragging the price of yarn down with it. In India, where the prices of cotton held by the CCI have been lowered, it is mainly traders who are stepping in, continuing to increase their “long” positions, while manufacturers are taking a wait-and-see approach.

In any case, the end of the war could help lead to a more relaxed end to the season. 

But we must remember that “peace” was achieved by employing a new concept of aggressive “diplomacy,” so a little vigor in our market won’t hurt it!