NYK futures slightly down since last report on Sept 7
22 Sep '06
3 min read
Most of the activity will be limited to importers, such as Indonesia, Bangladesh and Thailand trying to find the cheapest offers available, which are likely to be found in West Africa, Uzbekistan and India.
That US cotton is having a difficult time competing at the moment can be seen from the latest US export sales report, which shows total commitments at just 2.7 mio statistical bales so far, more than 3.2 mio bales behind the pace of last season.
Despite the fact that China is currently playing hard to catch with its import quotas, we do not believe that global cotton consumption is in as much trouble as the market seems to believe. While growth in the US and Europe is slowing down, there is no sign of that happening in China or India.
Even in the US there have been some positive developments for consumers lately, such as the steep drop in gasoline prices and a fall in longer-term interest rates, with the 30-year bond yield back at just 4.7 percent today.
This should help to lessen the chokehold on US consumers and we are therefore a bit more optimistic on retail consumption as we head into the all important Christmas season.
Therefore, unless China becomes more aggressive with its imports, the market is not likely to gain any traction. This will probably change in the second quarter of next year, when the production shortfall will begin to be felt in the marketplace.
marketing@alchempro.com
