Global cotton prices experience mixed movements over last month

The May and July futures contracts for the 2023-24 delivery season observed a notable decline, breaking through the previous support level of 90 cents per pound in early April. The prices for these contracts further decreased to approximately 85 cents per pound in recent trading sessions. This movement places the current prices squarely within the long-term range observed from November 2022 to early February 2024, which fluctuated between 78 and 90 cents per pound, Cotton Inc said in its Monthly Economic Letter - Cotton Market Fundamentals & Price Outlook April 2024.

On the other hand, the December futures contract, which reflects market expectations post the 2024-25 northern hemisphere harvest, remained relatively stable. Despite a recent surge in prices for the 2023-24 season, the December futures failed to rise above 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 fall in July futures prices, this gap has now narrowed to less than five cents per pound.

The A Index also reported a decrease, dropping from 102 to 92 cents per pound from early February to the present, with its recent peak being 107 cents per pound at the end of February.

The China Cotton Index (CC 3128B) remained steady at around 108 cents per pound, despite slight fluctuations in the exchange rate, which saw the Chinese yuan weaken from 7.19 to 7.23 RMB/USD.

In India, spot prices for Shankar-6 quality cotton declined modestly from 95 to 92 cents per pound. The Indian rupee remained stable at approximately ₹83 per USD, with the domestic cotton prices adjusting from ₹61,500 to ₹60,300 (~$737.12 to $722.73) per candy.

Pakistani cotton prices remained unchanged at 94 cents per pound in international markets, with domestic prices holding steady at 21,500 PKR (~$77.32) per maund, and the Pakistani rupee stable at 278 PKR/USD.

Fibre2Fashion News Desk (KD)