According to surveys, the 2020 cotton harvest has been in full swing in Australia’s cotton regions since late April (farmers’ seed cotton has mostly been pre-sold to cotton processing companies and traders), and it is expected that new cotton will be on the market from June to July. Or ship and ship according to the contract.
Currently, the May/September shipping date of 2020 M 1-5/32 Australian cotton in Qingdao, Zhangjiagang and other ports is quoted at 76.30-77.10 cents/pound, with the basis difference mostly at 1875-1950 points; M 1 -3/16 Australian cotton quotation is 77.50-77.65 cents/pound, with a basis difference of 2000-2200 points; while the basis difference of SM 1-5/32 reaches 2300-2400 points.
Some traders and cotton textile companies said that the quotations of Australian cotton in 2020 are too high, which is not only significantly higher than the affordability of cotton-related companies, but also puts the quotations of American cotton and Brazilian cotton by several blocks.
According to customs statistics, Australian cotton accounted for 6.8% of China’s total imports from January to February. In March, Australian cotton’s share of China’s total imports fell to 3%. On the one hand, the current spot, bonded and customs clearance The quotation of Australian cotton is significantly higher than that of US cotton and Brazilian cotton in 2019/20, and is not very competitive. On the other hand, it is affected by the large scale of foreign trade direct and indirect export orders that have not been canceled or suspended unless explicitly requested by buyers and brands. Use high-quality Australian cotton, otherwise manufacturers will use Xinjiang cotton, Brazilian cotton or American cotton instead; of course, the sales of Australian cotton in 2019 are coming to an end, and the quality of immediate or mid-to-late cotton in transit is also different from the actual needs of textile companies. Orders don’t match.
According to feedback from several international cotton merchants and trading companies, the pre-sale situation of Australian cotton in 2020 is not ideal. In addition to the high basis difference causing the cargo to be “high”, there are the following three Factors affecting contract procurement by Chinese companies (textile companies have reported that some Australian cotton commodity inspection quality indicators are inflated and will not be discussed):
First, in early May, the cotton area in southern New South Wales experienced rainfall and cooling, and cotton-related companies were worried about SM , the quality of GM grade cotton has been greatly affected, and a small number of traders have removed GM grade Australian cotton resources from the May/September shipping schedule;
Second, in order to speed up the implementation of the first phase of the Sino-US trade agreement, Chinese companies A large number of contracts will be signed to import 2019 and 2020 US cotton from May to October, which will have an impact on Australian cotton imports;
Thirdly, it may take a long time for high-quality and high-grade export orders of Chinese textile and garment enterprises to bottom out and recover. , the willingness to consume Australian cotton is also lower than expected. On the one hand, although Europe, the United States, Japan and South Korea and other countries have pressed the “start button” on economy and trade, the recovery period may last through the second half of 2020; on the other hand, with the epidemic raging and the presidential election in October, Trump and the White House are likely to There is no bottom line to “pass the blame” and suppress China. Irrational measures such as the “New Coronavirus Accountability Act” to “sanction China” and another increase in tariffs on Chinese imported goods may be introduced. The Chinese government and enterprises need to prepare for rainy days. Textile and clothing exports are the first to be affected and damaged. (Nonsense)
According to the announcement of the Ministry of Commerce of China, in November and December 2018, the Ministry of Commerce of China decided to launch anti-dumping and countervailing investigations on imported barley from Australia. Both investigations were completed one year later. It was extended for six months, with the deadlines being May 19 and June 21 this year. Considering the recent deterioration of Australia-China relations, it is worth paying attention to whether China will impose anti-dumping duties on Australian barley. Although cotton is not within the scope of the investigation, and Australian cotton production is low this year, in the long run, this will be a warning to Australian cotton exports. </p
