Short Term Market Strong Long Term Cotton Price Trend Is Not Optimistic.

In recent weeks, ICE cotton futures have continued to recover. Last weekend, the main force returned to the top 65 cents for the first time in three months in December. Although demand for high-grade cotton is very strong at present, cotton demand growth is not sustainable in the long run, and price rises may end.

As of October 18th, the ICE futures contract in December closed at 65 cents or more, rising 2% in a single week, rising 12% from the previous low of 58.21 cents.

Obviously, speculative bulls began to believe that the market was rebounding. Last week, tropical storm and Sino US negotiation optimism supported the market, and US cotton export data also preferred. In the spot market, the purchasing demand of cotton mills for high-grade cotton has been strong. The price of China's imported cotton has risen by 6-8% in total, while the price of cotton in India has dropped by 1-2%, which has a certain role in promoting exports.

China's domestic cotton prices have stopped falling, and reserve cotton stocks have dropped further. Import demand may exceed expectations and support the international market. Pakistan cotton mill's demand for high-grade cotton stimulates cotton prices to become stronger. Although India will start large-scale MSP acquisition in CCI, cotton production still has pressure on domestic prices.

In the short term, there will be some positive factors in the international market in the coming weeks, and prices are expected to remain high. In the long run, the increase in cotton production and stagnation of demand may keep stocks outside China at a high level. It should be noted that under the influence of consumers and fashions, cotton production may not be so sustainable now because cotton needs a lot of water and pesticides.