Global Cotton Market Outlook Zeki Sahin BCI Istanbul – 13.10.14
Dec 26, 2015
Global Cotton Market Outlook
Zeki Sahin BCI Istanbul – 13.10.14
Topics:
• Paul Reinhart AG
• Supply / Demand situation
• Technical analysis
• Outlook
About us:• Reinhart is a leading worldwide cotton
merchant founded in 1788 • Headquarter in Winterthur / Switzerland• Family owned company (7th Generation)• Annual turnover about 500’000ts (lint)• Involved in sustainably produced cotton (BCI,
CMIA, Fair Trade, Organic) / 4–5 % of turnover
4
5
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
0%
10%
20%
30%
40%
50%
60%
World fibres consumption in million tons
Cotton Cellulosic WoolPolyester Cotton share
6
2001
/200
2
2002
/200
3
2003
/200
4
2004
/200
5
2005
/200
6
2006
/200
7
2007
/200
8
2008
/200
9
2009
/201
0
2010
/201
1
2011
/201
2
2012
/201
3
2013
/201
4
2014
/201
518.00
20.00
22.00
24.00
26.00
28.00
30.00
10.00
12.00
14.00
16.00
18.00
20.00
22.00
24.00
21.4
9
19.8
1
21.0
7
26.4
5
25.3
5
26.6
1
26.0
5
23.3
5
22.3
7
25.4
7
27.5
6
26.7
7
25.7
5
25.6
9
20.5
6 21.4
2
21.3
5
23.7
5
25.4
3
26.9
8
26.9
2
23.9
6
25.8
9
24.9
7
22.4
4 23.2
5
23.6
1 24.4
1
World Production/Use/Ending Stocks(million metric tons)
ending stocks production use
7
2001
/200
2
2002
/200
3
2003
/200
4
2004
/200
5
2005
/200
6
2006
/200
7
2007
/200
8
2008
/200
9
2009
/201
0
2010
/201
1
2011
/201
2
2012
/201
3
2013
/201
4
2014
/201
50.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
4.10
3.80 4.
13
4.00
4.91
4.47 4.65
4.65
3.10
2.31
6.77
10.9
6
13.3
7
13.7
0
7.77
6.57
6.35
9.18
8.54 9.
25
8.85
8.72
7.16
8.66 9.
23
8.64
8.39
9.44
Ending Stocks(million metric tons)China World less China
8
2001
/200
2
2002
/200
3
2003
/200
4
2004
/200
5
2005
/200
6
2006
/200
7
2007
/200
8
2008
/200
9
2009
/201
0
2010
/201
1
2011
/201
2
2012
/201
3
2013
/201
4
2014
/201
50.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Chinaending stocks/use/production/imports
(million metric tons)ending stocks use production imports
9
2001
/200
2
2002
/200
3
2003
/200
4
2004
/200
5
2005
/200
6
2006
/200
7
2007
/200
8
2008
/200
9
2009
/201
0
2010
/201
1
2011
/201
2
2012
/201
3
2013
/201
4
2014
/201
50.00
1.00
2.00
3.00
4.00
5.00
6.00
USAending stocks/use/production/exports
(million metric tons)
ending stocks use production exports
10
2001
/200
2
2002
/200
3
2003
/200
4
2004
/200
5
2005
/200
6
2006
/200
7
2007
/200
8
2008
/200
9
2009
/201
0
2010
/201
1
2011
/201
2
2012
/201
3
2013
/201
4
2014
/201
50.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Indiaending stocks/use/production/exports
(million metric tons)
ending stocks use production exports
11
2001
/200
2
2002
/200
3
2003
/200
4
2004
/200
5
2005
/200
6
2006
/200
7
2007
/200
8
2008
/200
9
2009
/201
0
2010
/201
1
2011
/201
2
2012
/201
3
2013
/201
4
2014
/201
50.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
Turkeyending stocks/use/production/imports
(million metric tons)
ending stocks use production imports
12
2007 2008 2009 2010 2011 2012 2013
USA 616,187 383,076 410,002 431,170 419,449 295,956 444,263
Greece 87,697 89,198 176,636 148,581 40,163 130,876 136,189
Syria 3113 3899 7833 53398 142.879 82.61 37423.48
CIS 98,628 52,588 89,615 135,476 46,171 85,263 187,948
Israel 2737 873 651 271 159.523 80.612 76.343
Egypt 5921 6094 3051 4973 5016.154 5404.017 2571.7
W.Africa 8669 2234 2913 12134 5313.475 2054.358 3439.9
Brazil 8,673 20,070 18,664 34,122 47,587 69,818 37,518
Australia 660 41 0 1994 8848.29 724.387 202.713
India 0 24930 23007 50381 10531.823 3873.742 8518.03
Mersin FZ 14620 27233 10188 5186 3357.961 7251.151 5294.095
Other 98776 2653 9149 10150 15226.793 11250.387 4165.12
50,000
150,000
250,000
350,000
450,000
550,000
650,000
750,000
850,000
950,000
616,187
383,076 410,002 431,170 419,449295,956
444,263
87,697
89,198
176,636 148,58140,163
130,876
136,189
98,628
52,588
89,615135,476
46,171 85,263
187,948
8,673
20,070
18,664
34,122
47,587 69,818
37,518
TURKEY IMPORTS (thousand tons)
Thou
sans
tons
13
2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015
2.37 2.
61
5.34
4.43
2.96
1.74
0.87 0.93
0.72 0.
85 0.89 0.
98
0.54
0.52
0.50 0.57
0.58 0.63
0.96
0.73
0.52
0.80 0.
94
0.82
0.37
0.34
0.35 0.
52 0.70 0.74
0.34
0.31
0.20
0.48
0.33
0.35
0.30
0.26
0.22
0.21
0.23
0.22
Top 7 Cotton Importers(in million metric tons)
China Bangladesh Indonesia Turkey Vietnam Pakistan Mexico
14
2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015
2.62
3.13
2.55
2.84
2.29
2.18
1.43
1.09
2.41
1.69
1.98
1.24
0.46 0.
54
1.01
1.34
1.05
0.65
0.43
0.44
1.04
0.94
0.49
0.81
1.30
0.99
0.92
1.15
0.95
0.78
0.48
0.46 0.
53
0.89
0.87
0.83
0.25
0.25 0.29
0.28
0.26
0.25
Top 7 Cotton Exporters(in million metric tons)
USA India Australia Brazil CIS WAF EAF
15
16
05-Ja
n-10
09-F
eb-1
016
-Mar
-10
20-A
pr-1
025
-May
-10
29-Ju
ne-1
003
-Aug
-10
07-S
ep-1
012
-Oct
-10
16-N
ov-1
021
-Dec
-10
25-Ja
n-11
01-M
ch-1
105
-Apr
-11
10-M
ay-1
114
-Jun-
1119
-Jly-
1123
-Aug
-11
27-S
ep-1
101
-Nov
-11
06-D
ec-1
110
-Jan-
1214
-Feb
-12
20-M
ch-1
224
-Apr
-12
29-M
ay-1
210
-July
-12
14-A
ug-1
217
-Sep
-12
23-O
ct-1
227
-Nov
-12
08-Ja
n-13
12-F
eb-1
319
-Mch
-13
23-A
pr-1
328
-May
-13
02-Jl
y-13
06-A
ug-1
310
-Sep
-13
15-O
ct-1
319
-Nov
-13
24-D
ec-1
328
-Jan-
1404
-Mar
-14
08-A
pr-1
413
-May
-14
17-Ju
n-14
22-Ju
l-14
26-A
ug-1
430
-Sep
-140
10000
20000
30000
40000
50000
60000
70000
40
60
80
100
120
140
160
180
200
220
CFTC - net index fund/swap dealer position (futures+options combined)
net index/swap dealers (lots) ICE futures
17
01
-De
c-0
90
5-J
an
-10
09
-Fe
b-1
01
6-M
ar-
10
20
-Ap
r-1
02
5-M
ay
-10
29
-Ju
ne
-10
03
-Au
g-1
00
7-S
ep
-10
12
-Oc
t-1
01
6-N
ov
-10
21
-De
c-1
02
5-J
an
-11
01
-Mc
h-1
10
5-A
pr-
11
10
-Ma
y-1
11
4-J
un
-11
19
-Jly
-11
23
-Au
g-1
12
7-S
ep
-11
01
-No
v-1
10
6-D
ec
-11
10
-Ja
n-1
21
4-F
eb
-12
20
-Mc
h-1
22
4-A
pr-
12
29
-Ma
y-1
21
0-J
uly
-12
14
-Au
g-1
21
7-S
ep
-12
23
-Oc
t-1
22
7-N
ov
-12
08
-Ja
n-1
31
2-F
eb
-13
19
-Mc
h-1
32
3-A
pr-
13
28
-Ma
y-1
30
2-J
ly-1
30
6-A
ug
-13
10
-Se
p-1
31
5-O
ct-
13
19
-No
v-1
32
4-D
ec
-13
28
-Ja
n-1
40
4-M
ar-
14
08
-Ap
r-1
41
3-M
ay
-14
17
-Ju
n-1
42
2-J
ul-
14
26
-Au
g-1
43
0-S
ep
-14
-180000
-160000
-140000
-120000
-100000
-80000
-60000
-40000
-20000
0
30
50
70
90
110
130
150
170
190
210
CFTC - net commercial position (futures+option combined)
net commercial ICE futures
US Dollar Index, daily, 1 year back
18
19
Cotton futures most active month continuation, monthly, 30 years back
20
Cotton futures most active month continuation, weekly, 5 years back
21
Cotton futures most active month continuation, daily, 1 year back
Market Outlook season 2014/15:• China: watch the government policy, imports will be reduced, less
quotas available, support price for farmers remains high, competitiveness of mills remains challenging.
• Producers do not like current prices and seek for governmental support (China, India (MSP), USA (USDA Loan program), Greece (EU subsidy), Brazil and others). Prices are close to production cost.
• Record ending world stocks, see Supply and Demand table.• Speculators are slightly short. They can change position fast (they
prefer the long side). • Exterior factors: - health of global economy?, - stronger US Dollar, -
end of zero interest policy? - Commodity prices under pressure, - war in Syria, Irak. Mainly negative…
Cotton Prices for 2014/15• Expect more pressure on prices in general • Expect a narrow range of price fluctuation• Expect an increase in global cotton consumption• Harvesting and ginning accelerates in the coming
weeks, which will increase availability • Support program of governments for farmers may take
off temporary supply of raw material• Hand to mouth buying for mills will continue • Watch planting intentions in spring 2015• BCI cotton will increase market share…
THANK YOU!
http://www.reinhart.com