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Pakistan'S Cotton Prices Hit A New High

2021/10/13 14:02:00 0

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? Recently, the domestic cotton price in Pakistan continued to rise. On October 8, the new cotton price broke through the line of 15000 rupees / moned, setting a new high since 2011. Recently, the international cotton price continued to rise, combined with the strong domestic demand for new cotton in Pakistan and the expected reduction of production and other internal and external factors, jointly contributed to the price rise of this round of new cotton. Specific reasons

I. strong rise of international cotton price supports new cotton quotation

Recently, boosted by the admission of buyers and the rise of the peripheral US stocks and grain markets, the trading focus of the New Zealand Futures market has risen significantly, and the closing price has continuously set a new high for more than 10 years, and the international cotton spot price has also increased significantly. In spite of the recent increase in Pakistan's new cotton market, supported by the rise of New Zealand period, cotton prices are still gradually adjusted to a new high.

2. Domestic production reduction is expected to be strong, and the gap between production and demand continues to enlarge

As of October 1, Pakistan's seed cotton market in the new year accounted for 596000 tons of lint cotton, an increase of 101.6% over the previous year. With the accelerated listing of new cotton and the recent good weather, some domestic institutions in Pakistan are more optimistic about the cotton output of Pakistan this year, which is expected to be around 1.35 million tons. Even so, compared with the consumption of about 2 million tons, the gap between supply and demand continues to exist, boosting cotton prices to hit new highs.

3. Global consumption continues to recover in the new year

According to the U.S. Department of agriculture (USDA) global cotton supply and demand forecast monthly data show that the global cotton consumption in 2021 / 22 is expected to increase month by month, while the end of the period inventory is reduced month by month. According to the USDA global cotton supply and demand forecast in September, the global cotton inventory consumption ratio has dropped to 70%, which may form a sustained support for new cotton prices in various countries.

Fourth, the transportation capacity continues to be tight, and the import shipping date is not guaranteed

In addition, affected by the epidemic, it is difficult for many ports around the world to maintain normal operation, and the soaring sea freight has exacerbated the high cost predicament of Pakistan's cotton imports. Due to the structural imbalance of global transportation capacity, it is difficult to guarantee the loading period of contracted imported cotton, and the spot shipment is relatively limited, which can not meet Pakistan's domestic consumption demand. Textile enterprises have no choice but to catch up with domestic new cotton.

5. Pakistan Rupee continues to depreciate and import costs are high

Recently, the continuous depreciation of Pakistan Rupee against the U.S. dollar has led to the high cost of imported cotton. The willingness of domestic textile enterprises to purchase imported cotton has been greatly weakened compared with the previous period, which has also pushed up the price of new cotton in Pakistan to a certain extent. It is also heard that the Central Bank of Pakistan has decided to implement mandatory measures to limit the purchase of US dollars to ease the depreciation of the rupee from October 22.