According to customs statistics, U.S. cotton accounted for 45% of my country’s total cotton imports in 2020, followed by Brazilian cotton and Indian cotton, accounting for 29% and 12% respectively; before 2019, the top two imports were Brazilian cotton and Indian cotton. The proportion of Australian cotton has dropped sharply, especially medium and high-quality Australian cotton, which is gradually moving away from the Chinese market and is not paid attention to or even ignored by textile companies and traders.
According to feedback from several international cotton merchants and Australian cotton export companies, inquiries and transactions for cargo, bonded, and customs clearance Australian cotton from January to February 2021 are still relatively deserted, compared with Indian and Brazilian cotton. The periodic activity is in sharp contrast.
There are three reasons analyzed by the industry: First, China-Australia relations are difficult to repair due to Australia’s continued damage; second, Australia’s cotton output in 2020 is only about 600,000 bales and the quality is high due to weather, cotton seeds and other reasons. The proportion of high-index cotton is lower than in previous years; third, the price of Australian cotton in 2020 is significantly higher than that of competitors such as US cotton and Brazilian cotton (the basis difference of Australian cotton once reached 22-23 cents/pound, but is currently down to 13-15 cents/lb). cents/pound).
Despite this, the author believes that Australian cotton exports to China are expected to stabilize and rebound in 2021, and the proportion of China’s total cotton imports is expected to rebound. The reasons include briefly summarized as follows:
Firstly, With Biden entering the White House, the confrontation between China and the United States in trade, politics, military and other fields is expected to ease, and China-Australia relations are expected to break the ice with the recovery of Sino-US relations; second, the Australian industry expects Australian cotton production to reach 2.6 million in 2020/21 There are about 2 million bales (an increase of nearly 2 million bales compared with the previous year), and the grade and quality are relatively ideal, which seriously does not match the demand of cotton mills in Vietnam, Bangladesh and other countries to purchase low-index cotton. Therefore, they can only rely on Chinese procurement; thirdly, with the The global economy, trade, transportation, etc. are recovering rapidly, and Chinese textile companies’ consumer demand for high-quality and high-grade cotton continues to rebound. On the one hand, the price of domestic long-staple cotton in China is not only high, but also in tight supply; although Australian cotton is weak, its 1-3/16 and above indicators can still partially replace long-staple cotton with high-count cotton yarn; on the other hand, the U.S. government The import ban on Xinjiang cotton products has not been lifted; in addition, U.S. cotton has gradually been “oversold” in 2020/21 so far, and Brazilian cotton planting area and production forecast are sluggish, which will help Chinese companies sign Australian cotton; fourth, Australian cotton The price difference with US cotton and Brazilian cotton continues to narrow.
From the survey, the current net weight “fixed prices” of Australian cotton spot M 1-1/8 and M 1-3/16 in ports such as Qingdao and Zhangjiagang are 17,500-17,700 yuan/ton and 18,000 respectively. -18,100 yuan/ton; while the net weight basis difference of US cotton 31-4 37 of the same quality and grade is quoted at 17,350-17,450 yuan/ton; M 1-1/8 Brazilian cotton is quoted at 16,600-16,700 yuan/ton, and the price difference is higher than that of the previous ones. The month continues to shrink. </p