International Observation: Why Cotton Imports Broke Out Again In October

According to customs statistics, China imported 208100 tons of cotton in October, a decrease of 1% compared with the previous month, but a year-on-year growth rate of 185%; from January to October 2020, China's cumulative import of cotton was about 1.61 million tons, a year-on-year increase of 1.1% (but from September to October, the cumulative import of cotton reached 420000 tons, a year-on-year increase of 169%).

Specifically, in October, American cotton, Brazilian cotton, Indian cotton, West African cotton and Urumqi cotton were still in the forefront of import. The import volume of American cotton accounted for more than 50% of the total import volume of that month in 2018 / 19 and 2019 / 21 (more than 100000 tons again), and the cotton resources of medium and high grade and quality with m grade and above, 1-1 / 8 and above were the main cotton resources.

It is worth noting that the import of Indian cotton (including CCI round out resources) in October showed a more obvious recovery trend than that in August / September, while the Brazil cotton increased again and again due to the increase of basis, and the purchase space of Port Bonded and customs clearance spot resources narrowed, and the proportion of Brazil cotton in the total import volume of that month decreased. In October, the price of bonded cotton in Qingdao and Zhangjiakou was very low.

Why did cotton import continue to increase significantly year on year in October? Several large cotton enterprises and textile enterprises summarized as follows:

First, 9 / 10 "short, flat and fast" orders for Thanksgiving and Christmas have suddenly exploded. A large part of cotton mills with low stock of raw materials and ready to buy as you use them rush to replenish their warehouses and work overtime to produce. From the perspective of transportation, epidemic prevention and price, it is a good option to purchase cotton from stock outside the port;

Secondly, in October 2020 / 21, Xinjiang cotton is in the peak period of purchase, processing and warehousing. Considering that the color grade and quality index of machine picked cotton in Northern Xinjiang are not very "powerful" and ginning plants are reluctant to sell, the short-term "double 28 / double 29" resources available in the mainland warehouse are tight;

Third, Urumqi, Kashgar and other places successively broke out the new crown epidemic, which not only significantly slowed down the import and export of cotton in the Kupi area, but also delayed the cotton purchasing of Xinjiang in 2020 / 21 by 10-15 days for the textile enterprises, cotton traders and futures companies in the mainland, etc., while American cotton and Brazilian cotton "took advantage of the opportunity";

Fourth, the "drama" of RMB exchange rate appreciation was staged in October, the import cost of foreign cotton decreased significantly, and the price difference between domestic and foreign cotton was continuously narrowed;

Fifth, in October, the additional 400000 tons of sliding tariff processing trade quota will be issued successively in 2020. For some export-oriented enterprises, the quota issuance can be described as a timely relief, easing the pressure on cotton cost of enterprises.