International cotton prices stop falling and stabilize, with sufficient momentum for mid- to long-term growth

Last week (June 25-July 1), international cotton prices fell further. Considering the severe drought in Texas, the continued strong cotton market demand in the next year, and the lower-than-expected output, it is expected that the next international Cotton prices are expected to stop falling and stabilize. Last week, due to the continuous depreciation of the Indian rupee and the unfavorable factors such as tariffs imposed by the trade friction between China and the United States, China's demand for Indian cotton increased, and the price of Indian cotton continued to rise.　　According to statistics, in the past week, the December contract price of ICE futures has fallen by 1.38 cents per pound, or 1.6%, which is a cumulative decrease of 9.1% from the level four weeks ago. Relatively speaking, the spot market price has little volatility. The Cotlook A index has fallen by only 7.4% in four weeks and is currently maintained in the 90-95 cents/lb range. According to market analysis, in the medium and long term, cotton prices in the international market will be supported by the following factors: In 2018, the cotton acreage in the United States will increase, but it is lower than previously expected. Texas suffers from a long-term drought, and the market may be affected. Find some support, the price may stabilize at the current level; China’s announcement of imposing a 25% tariff on cotton imported from the United States has been digested, and strong demand from other countries may maintain the price at a relatively high level last week. The devaluation of the renminbi may limit the competitiveness of foreign cotton in the Chinese market, which is conducive to the consumption of China’s domestic cotton and inventory; Chinese buyers canceled orders for U.S. cotton shifted to India, and as the rupee exchange rate fell to historical lows, The price of Indian cotton in dollar terms continues to fall, while the price of Indian cotton in rupees is rising.　　 At present, the price of cotton in Pakistan remains stable, and it is expected that the first batch of new cotton in Pakistan will be on the market in the next few weeks. Article Keywords: 　Pakistan, U.S. Cotton, China