Reporting Period 22 Sep – 05 Oct 2022
The New York cotton futures are showing more of a downward trend during the reporting period, moving up and down in waves, though. This makes it difficult for spinners to decide on purchases. Future movements have come close to the exchange trading limit for a day several times, both on the upside and downside. However, the current trend movements cannot be explained by the usual market mechanisms. After all, despite the hurricane threatening the harvest of East Coast fields in the U.S., prices fell instead of rising in anticipation of a reduction in supply. This is more indicative of macroeconomic influences.
Considering the former experience with the Covid-19 market development including supply shortfalls, lockdowns, and cancellations of already produced products, spinners are at odds with cotton purchases. In anticipation of an inflationary recession and due to the rising energy costs, the factories are limiting product lines to optimize inventories more tightly.
Bremen, October 7, 2022