Two reports from the US department of Agriculture brought nothing really new to New York market. .
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China production estimate for current season was not changed by the USDA in its monthly report about cotton world markets and trade. .
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India production was raised to 2.765 million tons, up 19.8% from previous season. .
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More importantly, world consumption for 2003-2004 (August-July) was once more lowered to 21.157 million tons, down 0.8% from previous season. .
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The USDA was last May still expecting a global cotton use of 21.55 million tons, up from last season 21.323 million tons. .
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Consumption is expected rising 2.4% in China at 6.575 million tons while falling 14.7% in the United States at 1.35 million tons. .
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The most important indicator -“stocks-to-use ratio”- is up 0.72% from November forecast but still down 4.52% from last season. .
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Prices should sharply rise from previous season as a result, and they already surged, actually. .
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Although dramatically falling in the past three weeks, cotton prices are still up about 10 cents per pound from the level reached by the end of past season.Prices are not expected dramatically changing until January, before possibly rebounding after all crops will have been delivered in the Northern hemisphere. .
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Any variation will depend on the level in demand from China. Chinese orders were only 39,600 US running bales in the week to December 4th, the USDA reported. .
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Total sales were a disappointing 154,000 bales, 47% below the previous week. .
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Rather than accepting a surge in cotton prices, China textile industry actually reduced production in the past weeks, according to a series of reports. .
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A large part of Chinese plants would currently run at losses, unable to raise their prices in line with the surge in their raw material costs. .
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Cotton prices less rapidly declined in the past week in China, down only 150 yuan per ton, in addition. Prices even Monday rose 150 yuan on China National Cotton Exchange (CNCE).After resisting the recent fall in New York prices, Pakistani rates finally decreased in the past week. Official spot rate by Karachi Cotton Association (KCA) declined from 3,255 rupees per maund last Monday down to 3,150 rupees (ex-gin) on December 15, a 2.33% drop. .
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Since the Pakistani rupee sharply fell in the past week, the same price was down nearly 9% in US dollar terms to 64.56 cents per pound, more than 10 cents below the peak reached by the end of October. .
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After rumors announced that textile mills were ready importing much more cotton, Pakistani ginners apparently offered large quantities that they were until now retaining. .
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Cotton imports from Pakistan are still expected surging this year, nevertheless, since consumption will largely exceed production
After resisting the recent fall in New York prices, Pakistani rates finally decreased in the past week. Official spot rate by Karachi Cotton Association (KCA) declined from 3,255 rupees per maund last Monday down to 3,150 rupees (ex-gin) on December 15, a 2.33% drop. .
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Since the Pakistani rupee sharply fell in the past week, the same price was down nearly 9% in US dollar terms to 64.56 cents per pound, more than 10 cents below the peak reached by the end of October. .
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After rumors announced that textile mills were ready importing much more cotton, Pakistani ginners apparently offered large quantities that they were until now retaining. .
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Cotton imports from Pakistan are still expected surging this year, nevertheless, since consumption will largely exceed production
Indian exporters could take advantage of Pakistani need for cotton. According to local sources, they already accumulated stocks in order to benefit from higher international cotton prices. .
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Large quantities of Indian cotton are already being offered on the markets while prices are rapidly rising at home as a result of lower arrivals in the past weeks. .
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Prices were up between 600 and 1,000 rupees per candy in the week to December 12th, according to East India Cotton Association. Heavy buying by largest textile groups was reported. .
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Prices declined in US$ terms, however, after the Indian currency further rose against the US dollar. .
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“Prices are expected to ease somewhat in December/January as arrivals peak in all growing areas,” said a report from US embassy in New Delhi.Prices fell in Turkey in the week to last Thursday after a new rise in the local currency against the US$. Benchmark Standard-1 Average was down 100,000 lira to 2,400,000 lira per kilo on the Izmir bourse. .
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Cotton consumption would fall from 1.37 million tons to 1.30 million tons this season, partly due to higher cotton prices, the US embassy in Ankara reports. .
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“Some local firms are already reported to replace cotton with man-made fibers as raw material,” the embassy said.
Date:12/18/2003
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