From the quotations of traders in Qingdao, Zhangjiagang, Guangzhou and other ports, on May 12-13, 2019/20 ME 31-3 36/37 (strong 28GPT), Brazilian cotton M 1-1/8 (36, Qiangli 28GPT) RMB net weight quotations are 12500-12600 yuan/ton and 12150-12250 yuan/ton respectively; while the 2019/20 Xinjiang “Double 28” machine-picked cotton quotation for warehouses in Henan, Shandong, Jiangsu and other places is about 11500-11600 Yuan/ton (equivalent to net weight price of 11,750-11,950 Yuan/ton, the difference in moisture resurgence is slightly larger), which is 550-850 Yuan/ton and 200-500 Yuan/ton respectively compared with US cotton and Brazilian cotton.
Although the total cotton inventory (bonded + non-bonded) in China’s major ports has exceeded 600,000 tons as of mid-May, bonded and customs-cleared foreign cotton transactions and shipments have continued to be slow for two months, and trade Commercial sales and financial pressure are increasing day by day; and the industry generally believes that in the “post-epidemic” era, China will sign a large number of contracts to import U.S. cotton in order to fulfill the first phase of the Sino-U.S. trade agreement. However, traders are not motivated and willing to cut prices and sell goods. U.S. cotton, Medium and high-quality machine-picked cotton such as Brazilian cotton and Xinjiang cotton continue to be “upside-down”.
Why is the quotation of high-quality foreign cotton for port customs clearance “preferring shortage to excess” (except Indian cotton, etc.)? Some cotton companies and cotton textile companies believe that the reasons can be summarized as follows:
First, most of the foreign cotton signing periods currently cleared for customs clearance in 2019/20 are from November 2019 to January 2020, with ICE’s main contracts The market price is 66-70 cents/pound (higher than the current market price of 10-15 cents/pound); coupled with the sharp increase in shipping prices of cotton and other products caused by the new crown epidemic in February and March and various accumulated port charges, import companies, trade The cost of commercial lint cotton is “extremely high”;
Secondly, in the past two years, most small and medium-sized cotton import companies have withdrawn, and imported cotton resources have been concentrated in large companies and traders. Not only are funds relatively sufficient, but Zheng Cotton Tao has also been fully utilized Insurance, options and other transactions are used to avoid risks, and the ability to withstand price fluctuations of ICE and Zheng cotton has been significantly enhanced;
Third, countries have pressed the “start button” on economy, trade, exchange, retail and China 4- The continued large-scale signing of contracts to import U.S. cotton in August is highly expected to drive a strong rebound in domestic and foreign cotton prices;
Fourthly, with the drought and resurgence of locust plagues in grain-producing countries in Africa and Southeast Asia, central banks of various countries are “opening floodgates and releasing water” and even “helicopters” “Throw money” to reduce the impact of the COVID-19 epidemic on the economy and real enterprises. It is expected that agricultural product prices (especially grain) will continue to be on an upward path in 2020, forming a strong support for the rebound of cotton prices. </p
