According to feedback from cotton trading companies in Zhangjiagang, Qingdao, Guangzhou and other places, the contracts of Zheng cotton have fallen sharply in the past two days (the lowest point in night trading on September 8 was 12,215 yuan/ton). Therefore, the basis price difference between domestic cotton and port-cleared cotton , and fixed price have all adjusted back significantly; however, because ICE cotton futures have shown relatively strong resilience, the main contracts continue to consolidate at 64-65 cents/pound; coupled with international cotton companies and traders lowering basis spreads, The willingness to promote and sell goods is not strong, so the September/December shipping schedule and inquiries and shipments of bonded Brazilian cotton, US cotton, Indian cotton, etc. have slowed down significantly compared with the previous two weeks. As the price competitiveness of domestic cotton spot and reserve cotton gradually recovers, the resistance to cargo, spot and bonded foreign cotton has increased.
On September 9-10, the quotations of Brazilian cotton M 1-1/8 and M 36/37 for the September/December shipping period were 69.3-70.3 cents/pound respectively (basis difference 4.5-6 cents) cents/pound), 70.8-71.3 cents/pound (basis difference 6.5-7.5 cents/pound), the import costs under sliding tariffs are 13,500-13,650 yuan/ton, 13,700-13,800 yuan/ton respectively, and currently the mainland The metric weight quotation of Xinjiang cotton machine-picked cotton of Grade 31 “Double 29” in the warehouse is only 12,400-12,600 yuan/ton. Considering the conversion of metric weight and net weight, Brazilian cotton of the same grade and quality under the sliding tax has little advantage in price.
The main reasons why international cotton merchants and large trading companies are unwilling to continue to reduce the basis of cargo and bonded cotton are as follows: First, due to China’s large number of contracted purchases, global food prices entering the rising channel and monetary policy If it continues to be loose, ICE will still show a strong trend in the medium and long term; secondly, according to Reuters, the United States will block the entire Xinjiang supply chain, including cotton, yarn, textiles, tomato products, etc., which was officially confirmed by CBP. Once implemented, my country’s export-oriented enterprises and brand clothing OEMs may have to purchase American cotton, Brazilian cotton, Indian cotton, Australian cotton, etc. to replace Xinjiang cotton to avoid export risks to the United States; third, the comprehensive recovery of textile and clothing production capacity in Southeast Asian countries is in line with cotton The contradiction of insufficient supply gradually emerged. According to reports, since August, the operating rate of yarn mills in Pakistan, India, Bangladesh, Vietnam and other countries has rebounded sharply and even reached full capacity, and cotton demand has bottomed out strongly; while due to insufficient supply of improved seeds, monsoon rains, locust plagues, etc., Pakistan has The gap between cotton supply and demand continues to expand; in India’s main cotton-producing region, Gujarat, not only the cotton planting area has declined sharply, but S-6 output is expected to decrease by more than 6% year-on-year. </p
