According to feedback from several international cotton merchants and cotton import companies, Indian cotton export quotations and MCX futures prices have continued to rise since early October, and the price difference between January and March “shipped goods” and Brazilian cotton and US cotton has continued to narrow. , competitiveness has declined compared with August/September; however, inquiries and demand for organic cotton and BCI cotton in India in 2019/20 and 2020/21 are very active, and supply and demand pressure needs to be released.
A large cotton company in Zhangjiagang said that currently most domestic cotton textile mills and middlemen need to bring BCI certificates when purchasing Indian cotton. Otherwise, the price will be greatly reduced or they will directly switch to purchasing Brazilian cotton and Central Asian cotton. Recently, Pradip Jain, chairman of the Khandesh Ginners Association, said that due to heavy rainfall, crop losses were about 10%; coupled with the new cotton harvest being delayed by about 15 days than normal, the quality, grade and other indicators of Indian organic cotton in 2020/21 are expected to decline. The contradiction with demand has expanded compared with the previous two years.
From the perspective of port quotations, the quantity of Indian cotton cleared at Qingdao Port on October 12-13 decreased significantly compared with August/September, and due to the very tight cotton import quota within the 1% tariff (requiring quota cooperation There are many cotton-related companies clearing customs), and some traders have gradually increased the number of bonded cotton RMB, requiring buyers to bring their own quotas for customs clearance; on the 13th, Huangdao Port M 1-5/32 Indian cotton brought its own 1% quota for customs clearance quotation of 12,600-12,700 yuan / ton; the quoted price of M 1-5/32 Indian cotton that has been cleared is as high as 13750-13900 yuan / ton. It is understood that the quotations of M 1-5/32 Indian cotton (2019/20 old cotton) for the October/November shipping date on the 13th are concentrated at 71.90-72.90 cents/pound (CNF), while the October/December shipping date is 2020. The price of new cotton M 1-5/32 (including M36) is about 74.90-75.50 cents/pound, and the price difference between the two is only 2-3 cents/pound.
Why do Indian cotton prices continue to rise despite the negative effects of the out-of-control epidemic, the appreciation of the rupee, and the growth of cotton production in 2020/21? The industry summarizes the following points:
First, CCI has once again started MSP purchases (significantly higher than the current spot delivery price of seed cotton), which has significantly increased the cost of lint; second, in the past week or so, the main contract of ICE cotton futures has Breaking 65 cents/pound, 68 cents/pound, and pointing to the 70 cents/pound mark; third, the main cotton-producing areas in the United States are constantly being hit by tropical storms and heavy rains, and there are increasing concerns about declining cotton production and quality. The weather is going smoothly for India, and its export competitiveness is expected to recover compared to its old rival, U.S. cotton. Fourth, although the epidemic in India has hit a “big bang”, the government still forcibly restarts the economy, “emphasizing employment and neglecting epidemic prevention.” Therefore, the load of textile, clothing and other industries is still at a relatively high level, and the recovery momentum of cotton and other consumption continues. </p
