Uncertain dynamics in world cotton – Prices, supply and demand Antonia Prescott Cotlook
2018 in review – A year of two halves
A Index – 30-year average
The Bull and the Bear
January to June 2018 – Bullish Factors
• Strong rises on ICE and ZCE futures platforms • On-call contracts • High demand for US cotton • Indian MSP • The China factor
Futures rise, fuelled in part by speculative activity
Huge increase in unfixed on-call contracts
Second-largest US exports in history
Increase for Indian MSP
China – increasing imports?
But…
Bearish influences
• Cooling Chinese economy • Difficulties for emerging markets • Trade war
Slowdown in China
Emerging markets – depreciation
Trade War
Falling consmption
So, what now?
Big markets – Big questions
China • Slowdown in consumption • Imports • State Reserve
US
• Huge surplus 2019/20? • Weather worries
India and Pakistan • Pest problems • Low yields • Seed varieties
Brazil • Area and crop expanding year on year • Logistical challenges
2019/20 – Supply and demand
Production estimate:
27 million bales
Consumption estimate:
26.7 million bales
World stocks rise by 460,000?
Thank you