Presentation_Ms.Antonia_Prescott

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