Global Cotton Prices Navigate Mixed Movements in Recent Weeks
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- Published: Wednesday, 17 April 2024 02:51
Cotton prices have experienced a diverse array of movements across different benchmarks in the past month, reflecting the intricacies of global market dynamics. According to insights provided by Cotton Incorporated, significant price adjustments, particularly in futures contracts on the New York Intercontinental Exchange (NY/ICE), have been observed.
The May and July futures contracts for the 2023-24 delivery season notably declined, breaching the previous support level of 90 cents per pound in early April. Recent trading sessions have seen these contracts further decrease to approximately 85 cents per pound. This downward movement places current prices within the long-term range observed from November 2022 to early February 2024, fluctuating between 78 and 90 cents per pound.
Conversely, the December futures contract, which reflects market expectations post the 2024-25 northern hemisphere harvest, has remained relatively stable. Despite recent fluctuations in prices for the 2023-24 season, the December futures failed to surpass 85 cents per pound, while the July futures briefly exceeded one dollar. This disparity initially widened the gap between the July and December futures to as much as 15 cents per pound. However, following the sharp decline in July futures prices, this gap has now narrowed to less than five cents per pound.
The A Index, a global indicator of cotton prices, has also reported a decrease, dropping from 102 to 92 cents per pound from early February to the present, with a recent peak at 107 cents per pound at the end of February.
Despite slight fluctuations in the exchange rate, the China Cotton Index (CC 3128B) remained steady at around 108 cents per pound. In India, spot prices for Shankar-6 quality cotton modestly declined from 95 to 92 cents per pound. The Indian rupee remained stable at approximately ₹83 per USD, with domestic cotton prices adjusting from ₹61,500 to ₹60,300 per candy.
Meanwhile, Pakistani cotton prices remained unchanged at 94 cents per pound in international markets, with domestic prices holding steady at 21,500 PKR per maund, and the Pakistani rupee stable at 278 PKR/USD.
The mixed movements in global cotton prices underscore the complex interplay of factors influencing the market, including supply and demand dynamics, currency fluctuations, and broader economic trends. As stakeholders continue to monitor these developments, agility and adaptability remain key in navigating the evolving landscape of the cotton industry.