– Reporting Period 09 – 22 March 2023 –
In the first week of the reporting period, the ICE futures Cotton No. 2 briefly fell below the 80 ct/lb mark for the first time in a long time, before recovering and immediately exceeding this level again. This was favoured by a recovery on the stock market and a weaker U.S. dollar exchange rate. In the second week, the turmoil in the financial sector, including the bankruptcy of the Silicon Valley Bank and the activities to rescue Credit Suisse, also affected the performance of the ICE futures Cotton No. 2. Prices fell to their lowest level since November 2022 at just over 77 ct/lb.
It remains unclear how consumer behaviour will develop, and hence demand from brands and retailers. In Germany, the number of clothing manufacturers with more than 49 employees fell by ten percent last year. As a result of the pandemic and with respect to the current cost increases, fears are raising that further bankruptcies might follow.
As reported before, there was generally cautious, restrained activity in the cotton market during this reporting period as well. The cotton demand was primarily driven by the need to cover short-term requirements.