It is reported that on February 23, the Cotton Corporation of India (CCI) raised the benchmark cotton sales price by 600 rupees/kander again for the 2019/20 and 2020/21 seasons, and at the same time lowered the daily cotton listing volume for the 2019/20 season to 50,000 tons (mainly because as of late February, CCI had only about 700,000 bales of old cotton in stock for 2019/20), increasing the daily auction volume of new cotton in 2020/21 to 121,000 tons. CCI plans to increase cotton auctions and rotations (including exports) from March to May, and has an obvious intention to withdraw funds and clear positions.
Industry analysis shows that the main reasons for CCI’s sharp increase in sales benchmark price are the following three factors:
First, ICE cotton futures continued to break upward after the Spring Festival, while MCX futures and Indian domestic spot prices increased significantly weaker than ICE and US cotton. , Brazilian cotton, etc., Indian cotton has outstanding cost-effectiveness advantages;
Second, CCI’s purchase volume in 2020/21 is expected to be about 10 million bales. Not only is the purchase volume significantly lower than that of 2019/20, it is also lower than the 12-13 million bales at the beginning of the year. expectations; in addition, this year, CCI has signed a contract to sell about 2.2-2.3 million bales of new cotton in 2020/21. As of now, CCI’s total cotton inventory is less than 8 million bales, and there is little pressure on funds, warehousing, and operations;
Third, 2020 The contracted exports of US cotton in 2021/21 are already oversold. According to the first phase of the China-US trade agreement in 2021, China will still purchase a large amount of US cotton in 2020/21 and 2021/22. The total Australian cotton output in 2020 is expected to be only about 2.5 million bales, and more than 80% will be the “dish” of Chinese sellers. Considering factors such as high sea freight, tight containers, and epidemic prevention and control, Bangladesh, Vietnam, China , Indonesia and other Asian buyers’ dependence on Indian cotton is only rising.
Cotton traders in Qingdao, Zhangjiagang and other places said that after the Spring Festival, the port spot transactions (bonded + customs clearance) were mainly Indian cotton and Brazilian cotton, while the US cotton was not traded due to the strong basis difference of traders and weak competitiveness. Active (customs clearance cotton shipments are even more deserted due to grade, quality and other reasons). A cotton importer in Jiangsu said that cotton spinning mills and middlemen have high recognition of the quality and spinnability of the Indian cotton sold by CCI in 2019/20 and 2020/21, and the actual transaction price is generally 100-150 higher than the exporter’s price. Yuan / ton.
From the quotation point of view, from February 23 to 24, the fixed price of Indian cotton CCI M 1-5/32 in Qingdao Port was lower than the basis price of Brazilian cotton M 1-1/8, which was about 500 yuan/ton, lower than 31 -3 The basis price of 36/37 US cotton is 600-700 yuan/ton. </p
