Has Cotton Prices Slumped In Recent Years?

Last week, the spot price of international cotton fell rapidly, and the market worried that the new crown virus pneumonia affected the downstream demand. Textile mills were startled. The spot market inquiry was generally limited, mostly for immediate demand, mainly from Bangladesh, Vietnam and Pakistan.

The rapid fall in cotton prices and the sharp fall in the stock and commodity markets also affected market confidence. Many reports said that the textile mills had withdrawn their enquiries during the sharp fall in prices. Although the basis of the current varieties has improved, the spot price is still down 6-7 cents from the previous week, which is nearly 10 cents lower than in mid January, and the implementation of the contract is worrying. If the market stabilizes, it may be a good opportunity to buy at a low point.

Since January 13th, the ICE futures contract in May has fallen by 15.1%, while the US 31-3-36 (GC) has fallen by 12.2%, the US Dow Jones index has dropped by 13.8%, the Chinese polyester and short price has dropped by 7.7%, the 32 yarn has dropped 1.4%, the 40 yarn has dropped 2.6%, the India 30 yarn has climbed 2.6%, the 40 yarn has increased, and the Pakistan yarn has not changed. On the face of it, cotton prices have fallen more than polyester and short, which should stimulate cotton consumption in the long run, but the reality is that market transactions are blocked in the short term.