Reporting Period 09 – 22 February 2023
The ICE futures Cotton No. 2 continued their sideways movement at the beginning of the reporting period but dropped significantly in the second week. Most recently, the futures recovered, but remained in the range near the 80-cent mark. Nevertheless, the rather low prices compared with recent months do not appear to be increasing buying appetite – caution continues to prevail on the market. The strengthening dollar as well as the still prevailing mixed situation of uncertain prospects regarding the economic development and thus demand are assumed to be the cause for this. At the same time, the U.S. economy having been robust so far has been arousing fears of further significant interest rate hikes.
The demand in Europe remained subdued, only few inquiries were recorded for near delivery dates. Overall, the market did see some closed contracts, but mainly to cover immediate demand. In view of the uncertain demand situation, many companies have tended to make short-term decisions. In addition to global economic developments, other influencing factors have been the earthquake in the heart of the Turkish textile processing, a slowdown in Pakistani processing and the Chinese economy, which has been recovering more slowly than expected from its zero-covid strategy.
Bremen, February 23, 2023