What is in this article?:
- Cotton prices push even higher
- Indian textile industry requests cotton export halt
- Chinese cotton takes another hit with frost
The weather problems in China and India — along with those in Pakistan, which has been hit with devastating floods — have the market “in a near panic,” said Mike Stevens, a trader in Louisiana. “There have been unwanted rains in both India and China and, now, possible frost in a northern (cotton-growing) Chinese province.
“The nervousness about the supply situation has kept upward pressure on Chinese internal prices — both cash and futures. In fact, Chinese prices were through the roof again (Monday night). … I think their spot market is somewhere around $1.30 to $1.35.”
Meanwhile, the Indian Spinners Association “is putting massive political pressure on the government to limit, or even stop, exports,” said Cleveland. “If that comes about it would explode (the cotton) market even further.”
Stevens said sources close to the Indian crop situation — “and this is where things really broke loose overnight — have expressed real nervousness about their supply situation owing to recent rains.
“India’s textile industry has urged their prime minister to ban cotton exports until January. They complain local mills face serious domestic scarcity and spiraling prices after ‘excessive exports.’”
The proposed ban is so volatile because many were relying on a record Indian crop to bridge the cotton supply gap.
“The argument given by the Indian textile industry … is that if the cotton is exported unabated, the industry will have to reduce capacity,” said Stevens. “That would cause large unemployment. They say only the cotton exportable surplus should leave (the country). … The argument coming from their textile people is pretty strong. The pipelines are empty.”