According to customs statistics, in March 2020, my country imported 201,000 tons of cotton, a year-on-year increase of 31.98%; in 2019/20 (September 2019-March 2020), my country imported a total of 1.0282 million tons of cotton, a year-on-year decrease of 18.14% %. Considering that February/March is a critical period for my country’s fight against the epidemic (textile companies and traders have low resumption of production and work, and the production and sales of gauze clothing are in a semi-stop state), new crown epidemics have broken out in various countries around the world, including Europe, the United States, Japan, South Korea, India, etc. “Floating the country” and blocking borders have caused trade, transportation, exchanges, etc. to press the “pause button”. Therefore, China’s cotton imports exceeded 200,000 tons in March, which was higher than the expectations of most institutions and cotton-related companies.
So how much foreign cotton can China import in 2019/20? (In 2018/19, China imported a total of 2.0286 million tons of cotton, a year-on-year increase of 53.49%). The author’s opinion is that it will not be less than 1.8 million tons and is even expected to exceed 2 million tons. The reasons are as follows:
Firstly, As the first phase of the China-U.S. trade agreement accelerates after the epidemic, China’s signing of contracts to purchase 2018/19 U.S. cotton from April to July is expected to continue. It is expected to import another 400,000-500,000 tons of U.S. cotton before the end of August; second, Brazilian cotton The quality, grade and spinnability are increasingly recognized by Chinese textile enterprises and traders, and the substitution of Australian cotton, American cotton and Ukrainian cotton continues to increase; as domestic textile, clothing, foreign trade and other industrial chains resume production and orders After recovery, Brazilian cotton is still expected to account for more than 40% of domestic cotton imports; third, Indian cotton has become more price competitive than U.S. cotton and Brazilian cotton, and the possibility of a counterattack cannot be ruled out. Recently, the price of Indian cotton in Qingdao Port for April/May shipping date M 1-5/32 is 63.10-63.60 cents/pound (ICE futures July contract + basis), while the price of ME/MOT 36 (1-5/32) The quotation is generally 65.70-66.30 cents/pound; the quotation of Brazilian cotton M 1-5/32 (36) reaches 67.20-67.50 cents/pound; Fourth, as developed countries such as Europe and the United States restart their economies, the transportation and retail industries Gradually recovering, some high-grade, high-value-added orders will still require the use of Australian cotton and high-quality American cotton. </p
