Quasi Tax Quotas Do Not Stimulate Short-Term Cotton Imports.

According to the notice on the issuance of cotton import slide tariff quotas in 2019, the cotton textile enterprises quota application time is from April 15 to 29, 2019. On May 11th -19, the economic and Trade Bureau of the NDRC has issued the relevant information on the import quota of cotton imports in 2019. The 800 thousand tons of quasi tariff tariffs on cotton import quotas have been "put to the wind". Some agencies and cotton producers predict that the quasi sliding tax quotas or before and after mid June will be distributed to the textile enterprises, and it may not be issued in full (800 thousand tons quota in 2018). The southern part of the province adopts batches and multiple dispensing. The spinning enterprises are ready to apply for collection at any time according to the actual import needs, and the relevant departments only control and grasp the total quantity of the quota.

The author's view is that in June, 800 thousand tons of import quotas fell to the ground, which had little effect on the import of cotton in the 2018/19 year. The focus of textile enterprises' attention and signing will be the Brazil cotton, India cotton, West African cotton and Ukrainian cotton in Australia cotton and 2019/20 in 2019. In the 2018 and 2019 years, the US cotton imports are not only "late" but also "absent".

According to statistics, as of the end of March, China imported 1 million 256 thousand and 100 tons of cotton in 2018/19, an increase of 82.86% over the same period. It is estimated that the total volume of imports this year will be between 180-200 tons.

Why does the issuance of quasi tax quotas do not stimulate imports in the short term?

First, with the sharp fall of Zheng cotton, compared with the "point price" Xinjiang cotton resources, the price advantage of outer cotton does not exist.

At the current price, the price of S-6, SM Brazil, SM West Africa cotton and SM Ukraine cotton is 14400-14600 yuan / ton (net weight) at the current export price. Since May 15th, the price of "Xinjiang" cotton pickup cotton "spot price" is basically 14300-14500 yuan / ton (weight). Taking into account the weight and gross weight factors, the actual price difference between inside and outside cotton is 200-300 yuan / ton, while the average daily paction price of Xinjiang cotton has dropped to 13600-13700 yuan / ton (weight), which is less than 300-500 yuan / ton of cotton under the sliding tax, and the competitiveness of outer cotton is not as good as before.

Second, the supply of domestic cotton resources is very high at present, and the coverage of high schools and low grades is not enough.

According to the cotton Logistics Association of China Cotton Association, as of the end of April, the national cotton turnover inventory was 3 million 441 thousand and 500 tons, an increase of 961 thousand and 600 tons compared to the same period. The turnover of commodity cotton turnover in Xinjiang area was 2 million 765 thousand and 400 tons, an increase of 871 thousand and 900 tons compared with the same period last year. In addition, the 1 million tons of cotton reserves were exported and the import volume of 12-15 tons of cotton per month, and the domestic gap theory before October will cease.

Third, before 2019/20, the choice of foreign cotton for textile enterprises is limited, and the quality and cotton blending requirements are limited.

Before October, except for the shipment of Australian cotton and delivery in Hong Kong, almost all of the new cotton in the year of 2019/20 were "looking forward to the end of the year". But in the current port, there are a large number of bonded and customs clearance stocks, but low quality Brazil cotton, low index India cotton and Mexico cotton are the main products. The price is not cheap and the quality is not high, and the attraction to our textile enterprises is not large. In the 2018/19, the US cotton was "put aside" because of the trade war between the twitter president and the US government.

Fourth, attention to the recent impact of RMB depreciation on cotton imports.

Since the beginning of May, the exchange rate of the US dollar against the RMB has been reduced to about 6.9 from 6.7.

Some agencies analyzed that the gap between China and the US economic fundamentals was narrowed and the Fed also suspended interest rates. The pressure of RMB depreciation has not risen sharply, and the probability of short-term breaking 7 is not large.