On September 14, the commodity market saw a general upward trend. While cotton prices surged significantly, they still trailed behind corn's impressive 2.4% gain. According to traders, the tight global cotton supply and limited new crop availability have driven strong market interest, particularly from Chinese textile mills. Additionally, stable yarn prices are providing textile mills with room to buy raw materials at higher levels, maintaining profit margins.
India is set to resume cotton exports on October 1, but the Indian textile industry has already begun lobbying for an early lifting of the export ban, aiming for January 2011. Since October 2009, Indian cotton prices have skyrocketed. The S-6 variety, which started the year at 63.43 cents per pound, has now climbed to 110 cents per pound, marking a 24.81-cent increase over the past 20 days. The head of India’s textile department has clearly urged the government to prioritize domestic mill needs before allowing exports to China, Pakistan, and Bangladesh. Meanwhile, due to rising costs, the Tirupp Exporters and Manufacturers Association (TEAMA) in India plans to shut down four textile mills in Tirupur on September 24 and 25.
Although the current cotton price environment appears favorable, the market has accumulated excessive speculative long positions—especially in China. If the price bubble bursts, it could lead to a sharp decline in U.S. cotton prices. However, both fundamental factors and technical charts suggest continued upward momentum. It remains unclear when the market might reverse. Looking at the overall trend, the ICE cotton futures are expected to reach as high as 97 cents per pound in the near future. With such uncertainty, traders remain cautious while watching for any signs of market exhaustion.
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