Global Cotton Demand Has Weakened And The Situation Has Not Changed.

In November, USDA forecast the report of Lido cotton, but the domestic seed cotton purchase price declined, cotton and downstream yarn and grey cloth inventory was higher, the domestic cotton market pressure remained, short thinking.

November USDA report on global cotton production and end inventory reduction

In October, the US Department of agriculture report showed that global cotton production, ending inventory reduction and import volume increased in 2019/2020. Global cotton production has been reduced by nearly 3 million packages, mainly from the United States, Pakistan, India and China, while other cotton producing countries such as Turkey and Turkmenistan have also reduced their output. Global cotton imports have increased by 1 million 100 thousand packs, while imports from Turkey, Pakistan and India have increased. Indonesia's imports have been cut by 200 thousand packages. Exports of Brazil, Benin, Greece and India increased. Due to the fact that inventory and consumption at the beginning of the world had not changed much, the final inventory reduction of the month ended by nearly 3 million packages, which was 80 million 800 thousand packs.

The report predicts that the US cotton production and final inventory will be cut down in 2019/2020, due to the reduction of cotton production in the southwestern United States. The US cotton output forecast dropped to 20 million 800 thousand packs, the annulus ratio reduced by 4%, domestic consumption and export volume unchanged, ending inventory reduction of 900 thousand packs, 6 million 100 thousand packs, but the inventory consumption ratio was 31%, still the highest level since 2008/2009.

Cotton industrial inventories decrease year by year, tax returns are high.

A sample survey of the national cotton market monitoring system showed that as of the beginning of November, the average number of cotton stocks used by the enterprises surveyed was about 28.7 days (including the quantity of cotton imported to Hong Kong), an increase of 0.6 days, a decrease of 7.6 days compared with the same period last year. Projections of the national cotton industry inventory of about 609 thousand tons, an increase of 2.3%, an increase of 24.5% over the same period last year. The cotton industry stock situation is different in the main provinces of the country. The cotton industry inventory in Jiangsu, Zhejiang and Hebei provinces is relatively large.

Purchasing intention survey showed that in early November, 72% of the enterprises were preparing to purchase cotton, up 8.2 percentage points, up 11 percentage points compared to the same period last year, 26.8% of the wait-and-see attitude, 5.7 percentage points lower than the previous year, down 9.6 percentage points compared to the same period last year, 1.2% of those who did not plan to purchase cotton, a decrease of 2.5 percentage points, a decrease of 1.4 percentage points. In the early November, 89% of the sampling enterprises planned to stabilize cotton blending ratio, a decrease of 6 percentage points, a decrease of 1.7 percentage points compared with the same period last year. 8.5% of the enterprises intend to increase the ratio of cotton to cotton, up 7.3 percentage points, up 3.2 percentage points compared with the same period last year, and 2.4% of the enterprises intend to reduce the ratio of cotton to cotton, a decrease of 1.3 percentage points, a decrease of 1.6 percentage points compared with the same period last year.

From the main port feedback up to November 11th and the statistics analysis of the main bonded warehouses in the mainland, the imported cotton warehouse stock is in a higher position at present, and the progress of port delivery is slow. This is mainly due to the narrowing of internal and external spreads and the insufficient driving force of downstream demand.

Downstream yarn and grey fabric production and sales rate increased, stock declined.

At the beginning of November, the yarn production and sales rate of the enterprises surveyed was 98.9%, up 2 percentage points, up 6.3 percentage points from the same period last year, 1.7 percentage points higher than the average level in the past three years, and 23.2 days in inventory sales, a decrease of 3.9 days, an increase of 3.3 days compared with that of the previous three years. The production and sale rate of cloth was 90.2%, an increase of 0.3 percentage points, a decrease of 4.9 percentage points over the same period last year, 6.1 percentage points lower than the average level in the past three years, and 50.1 days of inventory sales, a reduction of 0.1 days, an increase of 11.9 days from the previous year, 11.5 days higher than the average level of nearly three years. Although the downstream yarn and fabric inventory inventory ratio is relatively reduced, but still higher than the same year, it is worth long-term follow-up. In short, the situation of global cotton demand has weakened. Technically, Zheng cotton rebounded weak and suggested that it should be high and short.