Posted on 01/24/2023 4:36:32 PM PST by FarCenter
TOKYO -- Market watchers are bracing for the risk of a sharp rise in cotton prices as last year's flooding in Pakistan and concerns about trade barriers in India combine with an improving global economic outlook that could boost clothing demand.
Cotton futures have inched higher this month after largely staying in the same territory since November. Friday's close of 86.7 cents per pound in New York was up 4% from the end of 2022.
"We've been making long hedges in case of a rally," a trading house representative said in mid-January.
One of the biggest concerns involves output in Pakistan, which was the world's fifth-largest producer in the year ended July 31, with a 5% share. Widespread flooding over the summer devastated cotton crops, and heat waves have not helped.
The U.S. Department of Agriculture cut its yearly production estimate for Pakistan for four straight months through December. It now expects a 38% drop for the current August-July marketing year to 3.7 million bales -- the lowest in 40 years. Some analysts say a recovery could take years.
In neighboring India, which ranks second with a 21% share, trade policy is the main concern. The country imposed restrictions last year on exports of wheat, sugar and other agricultural products to secure domestic supply and keep prices stable. Though cotton was not included in these measures, some market watchers say such a move could come at any time.
Other countries appear unlikely to fill the gap. Weather also has been a problem in the U.S., which accounts for 15% of global output. Texas, a major cotton-growing state, has dealt with drought since last spring. The USDA estimates that nationwide cotton yields will fall 16% to 14.68 million bales.
(Excerpt) Read more at asia.nikkei.com ...
West Texans rejoice!
They must be out of their cotton picking mind
So guys will have to start wearing nylon undies?
They’ll be happy here in AZ also.
Got plenty here for sale in Alabama...
Pakistan is a basket case.
Earlier today, I read that the entire electrical grid collapsed, shutting down every major city in the country.
Regional grid failures happen every week.
This was the first time that the entire country went dark.
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