In the past week, spot transactions in the international market have remained sluggish. Due to sluggish downstream demand, yarn mills maintain ultra-low inventories and adopt a buy-as-you-go strategy. Although some countries may be the first to emerge from the stagnation after the blockade, and retail demand is expected to increase, the reality is that restarting the economy after a stagnation is very difficult and time-consuming.
In the past 2-3 weeks, even U.S. cotton, which has a ready buyer (China), has been difficult to export and sell. One of the reasons is that due to the tense relations between China and the United States, cotton merchants have tried their best not to use it. Become a victim yourself. However, other U.S. agricultural products such as wheat, soybeans and corn have recently been sold in large quantities to China.
The basis difference of Australian cotton’s new flowers in 2020 is around 1,600 points (SM 1-5/32 grade cotton), and the special price varieties are at 1,500 points. There was also a small amount of transactions at 1,450-1,500 points last week, and the transaction was M class. At the same time, the spot quotation basis of Australian cotton SM 1-5/32 grade cotton in China’s main port in 2019 is 1350 points. After the big Chinese buyer of Australian cotton broke the contract, it had an impact on the Australian cotton basis.
The basis difference of Brazilian cotton has dropped by 100 points. The current basis difference of the ex-warehouse price of M 1-1/8 grade cotton in China’s bonded area is 450 points, and the transaction price of consigned cotton last week was 550 points. The basis for high-grade West African cotton in Chittagong, Bangladesh, is 600 points.
Affected by the Cold War between China and the United States, China’s current demand for cotton imports has basically subsided. Purchases from other countries have also been suppressed by the recent rise in cotton prices. Spinners have rejected the sharp increase in raw material prices. At the same time, CCI India started selling inventory at low prices in the domestic and export markets.
Last week, the quotations of US cotton in Asia fell, and India’s quotations in the Chinese market fell sharply. The price of S-6 was 63.80 cents, while the EMOT of US cotton was 71.95 cents. As new cotton comes on the market, demand for cotton in Pakistan rises.
Overall, with the recovery of cotton textile production and prices, cotton prices are currently relatively stable. </p
