Cotton – Cotton prices reached new record highs in the last month in New York, mostly reflecting speculative buying. Chinese demand also remains strong, due to surging clothing retail sales at home and further expanding textile and apparel exports. Huge intra-session volatility during the past week reflects a growing panic over the futures market.
Reflecting the level in Chinese immediate needs, US upland sales surged 37% in the week to January 20th with China ordering more than 100,000 running bales. The US cotton crop is now fully ginned and availability of the fiber will progressively decline as a result, boosting prices to higher levels on the international market. In India, there is no sign yet that cotton exports may be allowed beyond the current annual limit.
2011 contracts as of today:
March: $1.70 ($1.45 on 1/18)
July: $1.56 ($1.34 on 1/18)
October: $1.29 ($1.13 on 1/18)
December: $1.15 ($1.03 on 1/18)
Polyester – Raw material costs of polyester fiber producers continued rising in the last week in Asia, albeit at far less steep levels than cotton with further increases expected after the CNY. Demand is expected to further increase as brands switch to polyester or blended fabrics due to continued increases in cotton prices.
Oil remained unchanged this week at $91 up 20% in the past 12 months.
Import Volumes from China Slowing – US imports from China began seriously slowing down in the fourth quarter last year, in volume terms, according to preliminary data which were just released by the US Department of Commerce. Bangladesh apparently took advantage of a sharp rebound in US demand in a series of categories, while Vietnam’s results were mixed. Indonesia, India and Central America clearly kept some strong competitiveness in certain specific categories.
In 338/339 (cotton knit shirts) for instance, Chinese shipments only rose 9% from the fourth quarter in 2009, after surging 40% in the first three quarters of the year. By contrast, Honduran shipments rose 31% in fourth quarter after only rising 17% over the first nine months.
Imports from El Salvador gained 34% in the October-December period, after being up 19% in the January-September period. In 347/348 (cotton trousers), Chinese shipments only rose 4.7% in volume terms in fourth quarter, compared with a 22% rise in imports from Bangladesh.
