This Friday (18), the Brazilian Association of Cotton Producers (Abrapa) released its Market Intelligence Bulletin. The report shows that the cotton market continues to show volatility around the world.
However, the week showed signs of strength in fiber consumption, a fact considered one of the positive points of the week, in addition to the reduction in inflation in the United States.
Check out the highlights brought by the Abrapa Market Intelligence Bulletin:
Cotton in NY 1 – The Dec/22 contract closed yesterday at 87.04 U$c/lp (+0.76%).
Cotton in NY 2 – Reference for the 2022/23 harvest, the Dec/23 contract was quoted at 79.17 U$c/lp (+0.98%) and the Dec/24 contract at 76.90 (+0.84 %) for the 2023/24 harvest.
Prices (17/11), Brazilian cotton was quoted at 106.75 U$c/lp (+225 pts) for shipment in Nov-Dec/22 (Middling 1-1/8″ (31-3-36) post Asia, Cotlook source). For shipments in Oct-Nov/23, the price reference closed at 98.50 U$c/lp (+150 pts).
Bullish 1 – Despite fears of a severe recession, consumption shows good signs of resilience in the US, with October numbers at the same levels as 2021.
Bullish 2 – And the expectation is for an increase, since the National Retail Federation of the US predicts that sales in November and December will be 6% to 8% higher than last year.
Bullish 3 – US inflation numbers for the month of October were lower than expected, giving hope that the Fed can reduce interest rate hikes going forward.
Bears 1 – US export sales this week were just 26,000 bales, the lowest in the trading year so far.
Bearish 2 – Retailers and industrialists around the world remain cautious on orders, which has kept demand across the chain still weak.
Bearers 3 – Despite having announced this week the easing of restriction measures due to Covid-19, China continues to pay a high economic price for the strategy adopted by the country to combat the disease.
Vietnam 1 – Next week, a Cotton Brazil delegation made up of cotton producers and exporters will be traveling through the main industrial regions of Vietnam, making technical visits to spinning mills and holding events in the cities of Hanoi and Ho Chi Minh City.
Vietnam 2 – The delegation, led by the president of Abrapa, Júlio Busato, will have the local support of the main entity of spinning industries in the country (VCOSA) and the Embassy of Brazil in Vietnam.
Vietnam 3 – Vietnam is the third largest global importer of cotton and the second largest importer of cotton from Brazil. The country annually imports 1.5 million tons of fiber.
Good example 1 – A member of the Responsible Brazilian Cotton (ABR) program, Fazenda Perdizes, from SLC, was presented as a case study on how payment for environmental services works at the United Nations Conference on Climate Change (COP 27).
Good example 2 – The CONSERV project remunerates the farm for preserving an area of 1,358 hectares of native vegetation, in addition to the requirements of the Brazilian Forestry Code. The case was included in the panel on Agriculture and Environmental Services in an initiative of the Cotton Brazil program.
USA – US cotton harvest advances to 71% (+9%), above the five-year average at 63% and last season at 64%. Around 52.5% of US cotton has already been sorted.
India – Exports of textile products and cotton clothing fell by 41.53% and 21.16% in India, respectively, for the year compared to 2021. The reason for the drop is the reduction in external demand caused by the slowdown of the world economy.
China – According to a survey by the Beijing Cotton Outlook (BCO), just over 30% of Chinese spinning mills had an operating rate above 90% in October. Orders last month were reduced to almost 50% of the industrial park.
Bangladesh – Low liquidity in the Bengali financial system has restricted credit for cotton importers. Another concern in Bangladesh is the energy shortage, which makes yarn production unstable.
Agenda – Next week is Thanksgiving in the US. Therefore, there will be no market on Thursday and on Friday the session will be partial.
Brazil – Exports – According to data from the Ministry of Economy, Brazil exported 91.5 thousand tons of cotton in the first two weeks of November/22. The average daily boarding was 24.2% higher when compared to November/21.
Brazil – Improvement 2021/22 – Until yesterday (11/17): BA (94%); GO (99%); MA (63%) MS (97%); MT (96%); MG (98%); SP (100%); IP (100%); PR (100%). Total Brazil: 93% benefited.
Brazil – Seeding 2022/23 – As of yesterday (11/17), 7% of the predicted area in the state of SP has already been sown. MG started planting in a few areas in the north of the state and BA in the southwest region.