The countdown to the U.S. election day on November 3rd is one day away. As one of the most important international events of the year, especially in recent years due to the Sino-U.S. trade dispute and the U.S. sanctions imposed on some cotton spinning companies in my country, this election has caused even greater concern. A high level of concern among cotton industry players. According to relevant media reports, starting from 8 a.m. on November 4, Beijing time, polling stations in various states in the United States will be closed one after another. Who will be the winner in the end, and how will domestic and foreign financial markets react? I believe it is a hot topic among all parties in the cotton market recently. Although no one knows who will ultimately win the U.S. election, many people in the industry believe that its impact on the cotton market will be the same.
First of all, most cotton-related companies believe that although cotton is a crop, it has strong financial attributes, so its price trend is more susceptible to interference from the entire financial market. Especially since the outbreak of Sino-US trade friction in 2018 to the implementation of the first phase of the Sino-US trade agreement at the beginning of this year, the trend of the cotton market has basically changed around the progress of negotiations between the two countries. In September, the United States plans to impose a ban on Xinjiang cotton and cotton products and add some domestic cotton-related companies to the entity list, which will have an adverse impact on the cotton market.
Secondly, as China and the United States are two superpowers in the world today, the integration of politics, economy, and culture, as well as inevitable market competition, will have a profound impact on current and even future development. According to the analysis of some professionals, no matter who is the winner of this U.S. election, it can be seen from the United States’ measures such as delaying the exclusion of some Chinese textile tariffs that the Chinese cotton market will face more challenges within a certain period of time.
Furthermore, due to the relatively high costs of domestic cotton textile raw materials and labor, some export-oriented companies have gradually switched to Southeast Asian and other countries. In recent years, the proportion of my country’s products exported to the United States has been relatively high. Switching to other countries will inevitably reduce the dependence on my country’s cotton to a certain extent, and the industrial layout will be adjusted.
In addition, the epidemic situation in some major textile consuming countries such as Europe, the United States, and India has worsened, causing domestic industry players to worry about the future sustainability of orders from downstream companies. Whether the short-term bearish sentiment will explode intensively, we may need to wait and see whether this fuse will be ignited. </p
