During the worst period of the COVID-19 epidemic in 2020, global demand for long-staple cotton dropped sharply, and exporters significantly lowered their quotations in order to stimulate transactions. At present, the demand for long-staple cotton is beginning to recover, and transactions are becoming more and more vigorous. The supply of major exporters will be limited before 2022.
Egypt’s cotton production this year has been reduced to 250,000 bales, and a total of 257,000 bales have been sold so far, both old and new. The inventory of old cotton is close to 190,000 bales. Therefore, the supply of long-staple cotton in Egypt is already very tight and will become even tighter in the future.
Pima cotton sales in the United States have also hit new highs recently. Nearly 620,000 bales have been signed this year, exceeding this year’s production, and old cotton stocks are being consumed rapidly. The U.S. Department of Agriculture also raised its Pima cotton export forecast to 750,000 bales.
The recovery in demand for long-staple cotton is mainly driven by regions outside China. The largest buyer of Egyptian cotton is India. Since this year, India has purchased a total of 33,000 tons of Egyptian long-staple cotton, followed by Pakistan, and China has purchased very little. The largest buyer of American Pima cotton is also India, with a total of 235,000 bales signed so far.
In addition to India, the consumption of long-staple cotton has also increased significantly in Vietnam, Pakistan, Peru, Bangladesh and Turkey. In Europe and other regions with low consumption, the demand for long-staple cotton has also increased. It can be said that the current demand range for long-staple cotton has significantly expanded, which also shows that consumer preferences are driving the demand for long-staple cotton. China’s demand is still strong, and a total of 122,200 bales of Pima cotton have been signed.
It is understood that due to the epidemic, the blockade of various countries around the world has led to a surge in demand for bed sheets and home textile products, and no product can compare with high-count combed pure cotton bed sheets. Bed sheet products from small American brands Orders have surged. Egyptian long-staple cotton and American Supima both have anti-counterfeiting technology, so market demand has increased significantly. A few years ago, counterfeiting was so rampant that major retailers and high-end products were forced to find ways to protect their brands.
As the demand for long-staple cotton increases, prices also begin to rise significantly. Currently, the price of grade 2 Pima cotton in the United States has risen to 151 cents/pound, a cumulative increase of 17 cents since December 31 last year. Egypt’s Giza 94 series rose by 15 cents to 135 cents/pound, and Israeli Pima cotton rose by 8 cents to 147 cents. The US domestic Pima cotton spot price also continued to rise. On January 25, the price of domestic Pima cotton in the United States rose again after December 16. All grades increased by 6 cents, and the single-day transaction reached 1,000 bales.
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