Last week (May 17-21), ICE cotton futures fluctuated and consolidated. After the price fell below 85 cents, the rigid demand of cotton mills began to appear, providing support for cotton prices.
According to foreign reports, transactions in the international spot market were very active last week. Textile mills in various countries actively replenished mid-term inventories, up to the first quarter of 2022. It can be seen that cotton prices fell sharply last week. Effectively stimulated demand. That week, there were a large number of transactions in all varieties. The largest transaction volume was West African cotton, whose CFT basis price was the most attractive. US cotton and Brazilian cotton also sold well in various places. Australian cotton basis was gradually accepted by textile mills. Sales also began to increase. In addition, cotton demand in Argentina, Greece and East Africa is very active. Overall, purchases from all importing countries have increased significantly, and transactions in the Chinese market have increased.
That week, Vietnam purchased a large amount of West African cotton, US cotton, Brazilian cotton and Australian cotton, and the inventory was replenished until the first quarter of 2022. Bangladesh purchases West African cotton, US cotton, and Brazilian cotton in transit and forward. Indonesia purchased Australian cotton, American cotton, Brazilian cotton and other varieties. Pakistan purchased new Brazilian 2022 cotton, new and old US cotton, Argentinian cotton, Australian cotton and East African cotton. The largest trading volumes are West African cotton in 2021 and 2022, and the basis difference of M 1-3/32 is very attractive to textile mills.
Turkish textile mills are operating at full capacity. After the reopening of the European and American markets, orders continue to flow, and many Chinese orders flow to Turkey. Therefore, textile mills purchase large quantities of US cotton, Brazilian cotton, and Argentine cotton. and Greek cotton. As the price difference between near and far ICE futures has narrowed and the main contract has fallen sharply, other countries are also actively purchasing. It is understood that most of the transactions that week were below 95 cents/pound, and a considerable part were below 90 cents/pound. China has purchased a certain amount of US cotton and Brazilian cotton, and the loading period is from July to September.
Indian cotton clearly lagged behind in this transaction. At present, India’s domestic cotton prices are high. After the ICE futures fell, the basis difference of Indian cotton increased, and the export quotation was not competitive. </p