There Are Still Worries About The Price Rise Of Non American Cotton In China.

In the past week, the international spot trading has been very mild. Brazil cotton continues to take the lead in the Chinese market, and its price is strong.

US cotton is mainly sold outside China. The price of India cotton 1-5/32 in the Chinese market is 79-80 cents, and the quoted price of Australian cotton SM 1-5/32 is 2100 points (May contract), which is obviously too high.

The Indonesian textile mill has purchased a considerable number of Brazil M 1-1/8 G5, with a base of 800 points and delivered in March August 2019 -2020.

We also purchased 1000 tons of us M/E GC 41-5-37, with a base of 500 points for shipment in May.

The paction price of M/E SLM 1-1/16 in Indonesia is 175 points, 5-6 month shipment, Mexico SLM 1/1-1/32 5.2 NCL, the paction price is 70 cents, the M 1-1/16 base of Argentina is 250-30 points, 1700-1800 points lower than the Australian cotton SM 1-5/32, and the US GC GC base is 300 points.

In recent weeks, yarn quotations have risen in most parts of the country, but it is reported that the actual turnover is more difficult, especially export is weaker than domestic sales. The main reason for price increase is the rise of cotton substitute prices. Another reason is that after the Spring Festival, Chinese textile mills must raise salaries to recruit workers, and the yarn price must rise to offset the increase in costs.

However, the demand for gauze in the lower reaches is still sluggish, and yarn stocks remain high, especially in Vietnam and Bangladesh.

Perhaps after the Sino US agreement is reached, the problem can be solved and the global macroeconomic situation will improve.

Extended reading

China purchases increase India Pakistan conflict mitigation

Recent recovery of cotton exports in India

According to traders in India, cotton prices in India rose more than other varieties in January 2019, causing India cotton exports to be blocked.

As cotton prices in India dropped to a low level in mid February, China has probably signed up 70-80 million bales of India cotton in recent weeks.

Up to now, India's cotton export volume has exceeded 4 million bales this year, shipping 330-350 packages.

In February, India MCX cotton futures fell to a low point of 20000 rupees / pack for nearly a year, and continued to linger at a low price, which is already 4 cents lower than that of West Africa cotton.

As India cotton is much lower than domestic cotton, Chinese buyers are turning to India cotton.

According to India cotton merchants, China has recently signed 40-50 million bales of cotton India after cancelling the US cotton contract.

According to USDA statistics, 94 thousand packages of cotton and cotton contracts were abolished in February.

Although USDA did not explain the specific reasons, an official of the international authoritative inspection agency said that the main reason for cancelling the contract was quality.

With the easing of the conflict between India and Pakistan, India's cotton exports to Pakistan began to recover in recent days. At the beginning of last week, about 100 India containers were sent to Pakistan.

It is understood that India's export sales to Pakistan have not increased recently, and the contracts already being signed are being shipped.

Before the conflict, India's cotton exports had been completed by about 80%, and India exported about 80-100 bales of cotton to Pakistan every year and imported about 300 thousand bales.

Australia's cotton tied inventory is high and exports are low in 2019.

From November 2018 to January 2019, Australia cotton exports were very active.

In January 2019, the total export volume of Australia cotton was shipped 247 thousand bales. The expected export volume of the export sales year (March -2) is 4 million 100 thousand packs.

Nevertheless, the current export is still far below the previous 4 million 500 thousand package, so the final inventory in 2018/19 will be higher.

Over the past three months (November, December and January), the shipment volume of Australia cotton to China has been 20-24 million, and Vietnam accounts for a high proportion. India, Pakistan and Bangladesh are still the main buyers.