Fashion
ICE cotton witnesses sharp rise on weaker dollar, strong exports
The most traded contract July 2026 settled at 82.20 cents per pound, up 3.00 cent or 3.79 per cent. The contract marked the highest close since late May 2024, indicating strong technical breakout. Cotton futures delivered a robust monthly gain of 17.4 per cent in April 2026, the best monthly rally seen in recent years.
Cotton rally driven by two macro tailwinds, weak dollar and firm crude, boosting export competitiveness and fibre substitution.
Strong US export sales rebound confirms demand resilience after a brief dip.
Technical breakout signals bullish momentum, with multi-year high closing levels.
Stable ICE stocks suggest no near-term supply pressure, supporting upside bias.
Weakness in the US Dollar Index played a crucial role by making US cotton exports more competitive and affordable in international markets. Lower dollar value directly encouraged higher buying interest from importing countries, supporting futures prices.
Crude oil price movement remained a key external driver influencing cotton market dynamics. Despite earlier declines in polyester (synthetic fibre) prices, a rebound in crude oil strengthened cotton’s relative competitiveness against man-made fibres. Higher crude oil prices increase production cost of polyester, thereby shifting demand preference towards cotton.
Market analysts emphasised that both crude oil linkage and weaker dollar provided dual support to cotton prices. Macro-driven buying interest has significantly improved overall market tone.
Geopolitical tensions, particularly risks of escalation in the Middle East, created volatility in global commodity markets. Due to these tensions, crude oil prices briefly spiked to around $126 per barrel, reaching a four-month high before easing slightly.
USDA weekly export sales report released on Thursday reflected strong recovery in demand fundamentals. For the week ending April 23, US net upland cotton export sales were reported at 162,870 bales which represents a sharp increase of 36 per cent compared to the previous week, signalling renewed buying activity.
Analysts said that the previous week’s weak export performance was temporary and not indicative of underlying demand weakness. The latest strong export data provided fresh bullish momentum and reinforced confidence among market participants.
ICE certified cotton stocks data showed total inventories at 165,681 bales as of April 29. Stable certified stock levels indicated no immediate supply pressure on the market.
Overall market direction remained bullish, supported by a combination of macroeconomic factors, improved export demand, and positive technical momentum in futures prices.
This morning (Indian Standard Time), ICE cotton for July 2026 was traded at 83.20 cents per pound (up 1.00 cent), cash cotton at 79.20 cents (up 3.00 cent), the May 2026 contract at 79.86 cents (up 3.00 cent), the October 2026 contract at 84.16 cents (up 0.91 cent), the December 2026 at 83.47 cents (up 0.60 cent) and the March 2027 contract at 84.25 cents (up 0.56 cent)). A few contracts remained at their previous closing levels, with no trading recorded so far today.
Fibre2Fashion News Desk (KUL)