Cotton Demand Is Sluggish And Cotton Prices Are Rising.

Last week, ICE cotton futures continued to rise driven by speculative short compensation. The main contract rose 2 cents, or 2.74%, while the rest of the contract rose slightly, while the December 2019 contract rose only 1.1 cents, or 1.4%. In recent weeks, contracts have risen by more than 5% in recent months, while contracts in December have risen by only 2.4%.

The recent rise in ICE futures is due to short speculative short returns. Stock demand is still sluggish, yarn stock is still higher than market expectations, and it will suppress cotton prices in the future.

In addition, cotton consumption is also overestimated as global economic growth continues to return. The Sino US trade talks were postponed to April, which is also bad news for the cotton market. This shows that China's demand for us cotton will not recover in the short term.

In the past two weeks, the price of cotton in Asia has been very strong. Cotton prices in India have bottomed out, and the standard spot has risen from 41400 rupees / candle in February 21st to 43000 rupees / candle in March 16th, or 3.9%. The average daily turnover of cotton in India suddenly decreased, indicating that the actual output was indeed much lower than expected. The India Cotton Association also further lowered the cotton production forecast in India. Meanwhile, China's demand for cotton in India has been greatly increased due to the Sino US trade war. With the rise of cotton prices in India, India's Cotton Corp has suspended the acquisition of MSP.

Pakistan's high quality cotton supply and the rebounding demand for spinning mills have led to a rise in domestic cotton prices, and the standard spot price has risen to 8700 rupees / Maud.

China's cotton prices have risen slightly, but the supply of new cotton in various domestic channels is still large. Although the purchase of imported cotton has increased recently, the stock of port consignment cotton is increasing. This year, 1% tariff quotas have been issued several times, and the import quotas of many enterprises have been used up very quickly. It is expected that China will not issue additional quotas for cotton until the Sino US trade is agreed.