#Raw Materials
Higher cotton prices are being driven by speculation, not fundamentals
The actions of speculative buyers have significantly increased the demand for futures contracts, ultimately exerting an upward force on cotton prices. A common pattern emerges as speculators invariably attract additional participation in the market, creating a feedback loop that escalates buying pressure and, consequently, prices.
The real story will start to unfold in the next few months when planting intentions are solidified (at least in the Northern Hemisphere). Planting intentions have been lower than in previous years, and it remains to be seen whether the recent higher prices will incentivize farmers to increase the area under cotton.
If the planted area remains below previous seasons' levels, and consumer sentiment improves — thus driving demand up in the 2024/25 season — then we can certainly expect higher prices to materialize and be justified by fundamentals, especially given the lower stocks in many of the largest countries.
Price Projections
The Secretariat’s current price forecast of the season-average A-index for 2023/24 ranges from 83.5 cents to 102.3 cents, with a midpoint of 91.73 cents per pound.
For the most up-to-date statistics, please refer to the Data Dashboard. It is updated with new data constantly, and that new information is immediately reflected on the Dashboard, making it a valuable, up-to-date resource all month long. You can view a video tutorial on how to use the ICAC Data Dashboard on the ICAC’s YouTube page.
Please note that the cotton balance sheets have been moved to the ICAC Data Dashboard. This ensures that the season balance sheets are always up-to-date and available whenever you need them. This also helps to reduce errors because the data is compiled directly from our database. They are included in this PDF report, but we strongly encourage users to obtain all data from the Dashboard.
Dashboard
https://icac.shinyapps.io/ICAC_Open_Data_Dashboaard/
