资讯 1 10 英文网 307 Feature 557760 White Turning Pale 2016-03-03 18:26:59 yangfang
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White Turning Pale
2016-03-03

Muqeet Bokhari of Icotton.Ltd has BBA & MBA degrees from USA and been associated with the textile industry for over 21 years & currently based in China. He has hands on experience of running and working in ginning, spinning, knitting and weaving industries. He also has global exposure of developing textile related businesses. 

 

Cotton is white rose of commodities blended in our lives, but now it’s turning pale. 

  

We have to look at the bigger picture and we can see that its not only cotton, commodities in general are making correction in prices after crude oil took a U-turn and went back a decade. 

  

Fall in cotton prices is not fresh, downward trend is happening for a while and the big four are on the same path.  Current NY cotton price is around 40% down from June 2013, 34% down from June 2014 and 14% down from June 2015. In the same order current China cotton is down around 38% from June 2013, 33% from June 2014 and 12% from June 2015, Indian cotton is down around 30% from June 2013, 33% from June 2014 and 11% from June 2015 and Pakistan cotton is down 25% from June 2013, 28% from June 2014 and 6% from June 2015.   

  

In drop of cotton prices, USA & China are almost at par with India following the leaders.  Pakistan drop is lowest among the group due to its maximum in-house consumption of the crop.  Indian cotton this year narrowly escaped a much bigger fall with Pakistan providing an opportunity to fill the gap due to its crop shortage of approximately 33.85 % i.e., 4.97 million bales from last year and higher cotton imports from Vietnam and Bangladesh. 

  

If we go back around 10 years NY cotton was in the 45 cents range and 15 years ago it was in the 30 cents range.  Let’s stop here and think that it’s very much possible for cotton to fall further unless for a while we start consuming it in our daily diet. 

  

Current scenario takes us in time when NY cotton touched US$ 2.10 per pound that was the highest ever price which resulted in building of buffer stocks on one side and higher production on the other without realizing that stocks can only come down by consumption and production can only sell, if required.