According to foreign media reports, ICE cotton futures prices have risen for the fifth consecutive month due to tight U.S. cotton supply, delayed harvest of new flowers and strong demand in Asia. In October, the December ICE cotton futures contract rose by 7.5% to about 114 cents/pound, a cumulative increase of 52% this year.
Currently, U.S. cotton export sales are booming. As of October 21, the volume of U.S. cotton export contracts increased by nearly one-third compared with the same period last year, and China’s contract volume increased year-on-year. U.S. futures analysts predict that delays in the U.S. new cotton harvest, low ICE warehouse receipts and strong imports from China may lead to a short squeeze in the December contract. Cotton prices could climb to $1.30/lb or even higher in the next two months.
The report believes that the continued rise in cotton prices has eroded the profits of clothing manufacturers. Judging from the export data, high prices are likely to continue, which may eventually affect consumers and increase the price of global clothing. According to analysis by foreign industry media, the current good demand from downstream textile mills has given the mills some confidence that they can pass on the increase in raw material costs to the downstream. Currently, the demand for the entire cotton textile industry chain is still growing, and there is insufficient inventory in all links – although on the surface it is still a normal ordering pattern. Not only that, the current profit situation of spinning mills is still good, especially when using low-priced raw material stocks in the early stage to produce high-grade yarn.
At the same time, consumer demand for cotton clothing also exceeded supply. Jon Devine, a supply chain economist at North Carolina research firm Cotton Inc., said U.S. imports of cotton apparel are increasing, but inventories in clothing stores are at historically low levels and U.S. import demand will remain strong. At the same time, as the number of epidemic cases in India decreases, domestic consumption in India is very strong and demand for textiles is very good. The current order situation has reached 110% of that before the epidemic. In addition, demand from other major textile exporting countries such as Vietnam, Pakistan, Indonesia and Bangladesh is also very strong. Foreign industry analysts say that as long as yarn prices remain strong, demand will continue to be the main driving force.
Foreign industry organizations believe that cotton prices will continue to remain above 100 cents due to setbacks in the cotton supply chain and the need for spinning mills to replenish inventories. When cotton demand rebounded this spring, a recovery in retail consumption in Europe and the United States drove demand for clothing and home textiles. Since then, cotton mill stocks have been depleted and demand for cotton has grown rapidly. However, supply chain issues have stalled export shipments of U.S. cotton to other regions. Affected by the weather, the arrival of new flowers in the northern hemisphere is generally late and cannot keep up with the growth in cotton demand in the current year.
At present, cotton prices in China remain high, cotton prices in India have risen to record highs due to large imports from Bangladesh and delays in the launch of new domestic cotton, and cotton prices in Pakistan have also hit a record high. All time high. Overall, demand from global yarn manufacturers is very strong, reflecting significant growth in yarn sales and exports in various countries. </p
