Increased activity resulting to new sales, optimistic feeling following yesterday's decision of the EU court.
This week was a relevant active one. The increased demand of international merchants during the past weeks resulted into some new sales based on either Dec '06 or March '07.
These forward sales were at levels of 150-200 pts ON Dec '06 or 100-150 pts OFF March '07 for the basic 41 color quality.
In the meantime Turkish spinners keep absorbing any small stocks in a couple of ginning mills paying high prices (130-132 c/kgs FOT).
Crop wise, cotton plants are developing very well under ideal weather conditions. Of course as explained in last week's report in some areas we are still about 7 days late.
Provided the weather conditions remain stable during September it is more likely that we will have a very good production in terms of quality & quantity. The harvesting period is estimated to begin in end September.
One thing that is still pending is the seed cotton delivering period for the coming crop. Ginners are afraid that if farmers get the right to deliver their seed cotton till end of March, there is a chance of facing a shortage of raw cotton in the first months of the new season.
Lastly, all ginners are very glad with yesterday's result of the EU court following the objection of Spain referring the new cap system.
The EU decided to cancel the subsidy system for cotton and will restructure a new system which will strongly engage cotton farmers with their production.
Under these circumstances, we will not have to fear that farmers will not pick up their cotton from their fields and we will have to re evaluate our estimations for cotton production in the coming years.
marketing@alchempro.com
