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Reporting Period 04 – 17 February 2021
Prices Have Continuously Increased
Even though with fluctuations, the futures knew only one direction by trend during the reporting period: further to the top. At last, they reached the highest level for 2.5 years. March futures were ending, December futures with the new crop have come to the fore. Amongst others, the futures market was shaped by position adjustments due to the first notice day on March 21, constantly good cotton sales in the U.S., euphoric expectations of a rising demand following a U.S. stimulus package in combination with growing fears of an impending inflation, high prices for other agricultural products like wheat as well as speculative business. The latest USDA estimates were published during the reporting period as well. Some sources, though, expressed their disbelief regarding production and stocks. Rising energy prices and economic uncertainties as well as the progress of the pandemic respectively vaccinations aroused further doubts whether the consumer demand will improve considerably soon, with respective consequences for the processing industry.
The local market registered noteworthy inquiries for the 2nd, 3rd and even 4th quarter. Still hesitant, only a few spinning industries were prepared to close contracts at these high prices, though. Yarn prices seemed to have risen, too. Nevertheless, most spinners postponed their purchase decision to a later date. The interest in organic cotton observed for several weeks has noticeably slackened, the more so as organic cotton prices have been on a high level too due to limited availability.
Bremen, February 18, 2021