Is There Any Hope That Foreign Cotton Will Pour Into The Chinese Market Again?

In late August, China

cotton

The pace has been getting closer and closer, and the 1 million tonnes of national cotton reserves sold out of the turn are not only a drop in volume, but as of August 26th, the cumulative turnover of cotton reserves has reached 58 thousand and 400 tons, with a turnover ratio of only 3.44%, and the paction price has also been declining. The downturn in the spot market has had a negative impact on Zheng, ICE and the whole market.

The market is more pessimistic, so as at the end of August, 19-20 tons of bonded cotton (including SM, M, SLM grade 65%-70%, Brazil cotton, Australia cotton and Uzbekistan cotton account for 20%-25%) will have a great opportunity to enter the market before China's new cotton comes into the market. The reasons are summarized as follows:

First, the demand for high-grade cotton has declined significantly.

At present, the overall quality and quality of port cotton, Brazil cotton, American cotton and Central Asia cotton are relatively high, and the low grade India cotton and West African cotton with good quality and low price are difficult to trace.

The production, consumption and export of high count yarn have been fully narrowed. The consumption of coarse yarn of C40S, C32S and below has reached a bottom rebound in autumn and winter.

Two, the Chinese government has no plans to increase import quotas.

Taking into account that there are still about 11000000 tons of huge quantities to be released in the State Cotton store, new cotton will not suppress cotton prices before the listing, and will not suppress the cotton farmers' gains and the first 1 million tons of national cotton reserves. In the 2012 year, the state reserve cotton has fully met the needs of cotton enterprises. The government will not increase import quotas in any form until the end of December 2015.

Three, banks and other import and export enterprises to tighten credit lines.

In 2013 and 2014, cotton prices both at home and abroad were "high before and after low". Most Chinese traders and cotton mills that signed long term shipping contracts and cotton contracts were losing money. Some cotton traders even suffered a "mess". They had difficulties in opening letters of credit or completing contracts. Since May, some traders in Qingdao and Zhangjiagang have had to default because they can not open letters of credit.

Four, after the cotton clearance, there is no advantage in price.

In late August, Qingdao, Shanghai, Guangzhou, Zhangjiagang and other ports SM 1-1/8 Mei cotton and SM 1-5/32 Australia cotton customs clearance after the RMB clothing price concentrated in 14200-14600 yuan / ton, 16200-16500 yuan / ton, and Xinjiang 2128 grade cotton price difference are 1200 yuan / ton, 3200 yuan / ton above, spinning enterprises are more inclined to purchase new cotton.

Five, the quality, grade and "three wire" control of Xinjiang cotton will be greatly improved in 2015/16, and the advantages such as cotton, Australian cotton and Brazil cotton will continue to be lost in "three silk" and "consistency".