Weekly Report: Demand on the Rise in Greece

New sales in Greece concluded as we get close to full swing harvesting. During the last 10 days, demand has increased — mostly on behalf of Far East merchants, who took the biggest share of recent sales. As soon as New York Futures fell below $1/lb, it seems that spinners in Far East started buying some quantities and merchants were able to pay good rates to ginners, either on fixed price or on call (close to even Dec. 2011). Other traditional international merchants increased their activity but their purchases were lower in volume.

Turkish spinners, who are focused on their crop, are still out of our market or passing prices below ginner’s expectations. In the beginning of the week there were rumors of new sales to the Egyptian market at levels of $1.08/lb cost, insurance and freight (CIF) included at Egyptian ports. Harvesting has started in most areas but mostly on the so-called dry fields (less irrigated). Since it hasn’t rained, quality is very nice, although we will be getting a clearer view in the following two weeks when the irrigated fields will be harvested and delivered to ginning mills. We can say that so far the crop looks very promising, both in terms of quality and quantity.

Calculating a production of lint at 300,000 tons, we estimate that about 10 percent is already committed. This figure includes also the rolled-over quantities from last season. The domestic consumption will be, of course, limited — possibly 20,000 tons — although some mills will reconsider their operation strategy in the coming weeks. Yarn prices fluctuations and low credit from Greek banks are limiting quantities.