In the past week, the international spot market has still not improved, with few purchases from other regions except China and Vietnam. Moreover, U.S. cotton exports to China only transfer U.S. cotton inventories to Chinese warehouses, rather than actually digesting them.
That week, there was a huge gap between the Australian cotton quotation and the buyer’s psychological price. Some cotton merchants continued to look for buyers who could take over the order at a high price (a basis difference of more than 2,000 points), and some also tried to lower the price, but the actual transaction was still Very difficult. In the current market environment, other varieties are difficult to sell, and Australian cotton is even more expensive.
With the rise in futures prices, the quotation basis of some origins has begun to weaken recently, and cotton merchants are also trying their best to digest inventory. Indian cotton prices (21-3-37) are very competitive, though. The pollution caused by cotton picking is serious, but blended yarn can be produced. Recently, the sales of low-count yarn are good and the rising cotton price may increase the price of stock yarn.
In May, Brazilian cotton exports fell by 15.5% year-on-year. After increasing by 165% in January, the growth of Brazilian cotton exports began to slow down until the recent year-on-year decline. As China’s demand for U.S. cotton increases, Brazilian cotton exports begin to be hindered. However, Turkey and Vietnam are still very active in purchasing Brazilian cotton, and the price is cheaper than US cotton. Next season, U.S. cotton production is expected to decrease, so Brazilian cotton exports are expected to increase.
The transaction volume of cotton from other origins is extremely light, and factories inquiring are looking for the cheapest cotton. With the rise of ICE futures, it is now increasingly difficult to purchase. Vietnam and Pakistan have imported Brazilian cotton, while Indian cotton is only exported to Bangladesh at a low price. The basis of West African cotton is still high. After ICE futures rise, its basis is expected to weaken. At present, Mali, Cote d’Ivoire and Togo all have origin quotations for old cotton, but the price gap is too big with the psychological price of cotton merchants, and transactions are very few.
As yarn stocks increase and yarn prices fall, the rise in ICE futures makes procurement more difficult for textile mills. The gap between cotton merchants’ quotations and factory inquiries is getting wider and wider, and basically no one is willing. purchase. From now until next year, global ending stocks continue to rise. India still has 2 million tons of CCI stocks and new cotton that is about to be harvested. Brazil’s output is also huge.
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