Since mid-June, Brazilian exporters and international cotton merchants have lowered the sales basis of Brazilian cotton in 2019/20 and 2020/21 together with the basis of Australian cotton. Shipping schedules are concentrated in August/December, and the quotations of old cotton Fully “in line” with new cotton FOB and CNF quotations; on August 4-5, the September/December shipping schedules of Qingdao, Zhangjiagang and other main ports in 2020/21 are quoted at 69.50-70.50 US dollars respectively. cents/pound, 72.45-73 cents/pound; and the quotation of 31-3 (31-4) 37 for the September/October shipping date of 2019/20 also reached 72.45-73.20 cents/pound.
An international cotton trading company in Huangdao said that although the quotations for Brazilian cotton for the August/October shipping schedule are relatively high, the weight of a single batch is not large (generally dozens or hundreds of tons), which makes it appear relatively large. Scattered, and the processing period, quality indicators, spinnability, etc. are quite different; while the quantity of new cotton supply in 2020/21 is huge, the quotation resources of export companies and traders are generally more than 3,000 tons, 5,000 tons or even 10,000 tons, most of which are One cotton region, one farm, one variety, so the lint is much more consistent.
Although the basis of Brazilian cotton in 2020/21 continues to decrease slightly (the current basis is 6.25-8 cents/pound, the higher the grade and the higher the quality, the higher the basis will naturally be), but due to the 4/ The basis set by cotton processing companies and exporters in May was too high (10-13 cents/pound). Therefore, even if the basis falls back to 4.5-6 cents/pound, the competitiveness of Brazilian cotton in 2020/21 still needs to be improved. According to traders’ quotations, the current price of US cotton M 1-1/8 in major ports in China for July/August shipping is 73.95-74.95 cents/pound, which is only 3-4 cents/pound higher than Brazilian cotton for the same shipping period; and it is customs cleared. Brazilian cotton is only 250-350 yuan/ton lower than US cotton, and 800-1,000 yuan/ton higher than Indian cotton of the same quality.
Traders in Henan, Jiangsu, Shandong and other places judge that it will be very difficult for Brazilian cotton to occupy “half the sky” of China’s total foreign cotton imports in 2020/21, although the Australian cotton output in 2020 is close to ” “cut in half”, to a certain extent, provides conditions for the growth of exports of medium and high-quality Brazilian cotton to China, Vietnam, Indonesia, etc. However, in addition to the fact that FOB and CNF prices are not “awesome”, there are also the following factors that restrict the export of Brazilian cotton to China: 1. The first phase of the China-U.S. trade agreement has not been broken and is still being implemented. Judging from statistics and statements from all parties, because China’s purchase of US cotton in the first half of 2020 is far from reaching the target, a large number of contracts to import US cotton may continue to be signed in 2020/21; secondly, for textile companies and import companies, quotas This “blocker” cannot be avoided or circumvented; third, the COVID-19 epidemic is raging in the United States, Brazil and other American countries. In order to reduce the pressure of imported viruses and strengthen prevention and control, China’s inspection and quarantine departments and enterprises have not signed contracts to import Brazilian cotton. Dare to slack off; fourth, the price advantage of Brazilian cotton compared with Xinjiang cotton is almost negligible. In early August, the transaction price of “Double 28” Xinjiang cotton in Henan, Shandong and other places was 12,450-12,550 yuan/ton (net weight); while the price of M 1-1/8 Brazilian cotton was 12,700-12,800 yuan/ton (net weight), which is the same as Xinjiang Cotton prices are highly “in line” and not very competitive. </p
