What Is The Impact Of The New Crown Pneumonia On The Cotton Industry?

Before the end of January, no one would expect the new type of pneumonia, the "black swan", to be astonishment even though it is expected that there will be an outbreak. With the start of the national epidemic prevention and control war, the number of confirmed cases has decreased continuously and the cure rate has risen sharply. The panic of the society, all walks of life and all walks of life has begun to subside. The cotton textile industry will also resume work in the middle of 2, and cotton consumption has finally seen the dawn of stopping, stabilizing and even rebounding.


What are the impacts of the epidemic on the cotton industry? The author summarizes the following points:


First, before and after the Spring Festival, the progress of cotton processing has slowed down greatly, thus affecting lint storage, public inspection, storage and sale.


Second, the cotton market has basically stopped due to various reasons such as warehouse pick-up, vehicle transportation and road restrictions.


Third, the replenishment of raw materials such as cotton mills and middlemen will be delayed for 10-15 days (some provinces, enterprises or longer). Even if the downstream enterprises return to work, they must pass the application, audit, disinfection and other checkpoints.


Fourthly, domestic and foreign cotton consumption expectations in 2019/20 will be lowered, and domestic demand is greater than supply. From the feedback of some textile enterprises and cotton enterprises, the epidemic has not only led to a sharp decline in domestic cotton demand in the first half of 2020, but also the import of cotton yarn and grey cloth from India to Pakistan, Vietnam and so on by Chinese weaving enterprises will also drop.


Fifthly, for some cotton enterprises, it was difficult to repay loans in March. From time to time, internal processing enterprises and traders are mainly covered by CF2005 contracts, and delivery, settlement and recovery of goods are "looking for the best." at present, no matter whether the price of Zhengyang cotton or the price of cotton in the auction is all less attractive to the cotton mill, the willingness of the cotton enterprises to send money back is relatively low.


In the month of six and 2-3, the progress of Xinjiang cotton's transfer and sale to the mainland was mainly restricted by shipping, capital, road closure, epidemic prevention and control. According to statistics from relevant departments, the transportation of highways transported by cotton has basically stagnated since January 31st.