Last week, ICE US cotton was boosted by the positive monthly supply and demand report of the US Department of Agriculture and the expectation of better Sino-US trade. The focus of futures prices rose more obviously. Among them, the average settlement price of the main US cotton contract was 66.23 cents/pound, which was higher than the previous The average price of the cotton spot price index (Kotruk A index) in the international market was 75.46 cents/pound, an increase of 1.42 cents/pound, or 2.19%, compared with the previous week, an increase of 1.41 cents/pound, or a discount of 1.90%. The RMB import cost was 12,842 yuan/ton, an increase of 240 yuan/ton from the previous week, an increase of 1.90%.
Last week, the average price of the cotton spot price index in the domestic market was 13,162 yuan/ton (China Cotton Price Index (3128B varieties) and the national cotton price index (3128B) arithmetic mean), an increase of 107 yuan/ton from the previous week, an increase of 0.82%.
By comparing domestic and foreign cotton prices, it can be clearly seen that the international cotton price rose higher than the domestic price last week. According to the calculation formula of the central reserve cotton rotation regulations, it can be concluded that the above The average price difference between domestic and foreign cotton this week was 320 yuan/ton, a month-on-month decrease of 133 yuan/ton.
On the evening of December 13, China held a press conference to release the “China Statement on the First Phase Economic and Trade Agreement between China and the United States.” The two sides reached an agreement that the United States would implement the phased cancellation of the agreement. Commitments related to additional tariffs on Chinese products have been implemented, and the tariffs have been changed from rising to falling. The U.S. USTR statement stated that the United States will maintain a 25% tariff on Chinese imports worth approximately US$250 billion, but will lower the tariff on other Chinese imports worth US$120 billion to approximately 7.5%. Both sides postponed the planned tariff increase originally scheduled for December 15.
The author believes that market tensions have been eased, and the domestic market still has a strong wait-and-see attitude towards the impact of the good news from China and the United States. According to the trend of Zheng cotton today, domestic cotton prices have not risen sharply, and the market is still skeptical about whether downstream demand can recover and improve. Compared with the continued downturn in the domestic downstream industry, the annual export situation of US cotton is better than last year. In addition, according to relevant media reports, China has promised to purchase US$40 billion in US agricultural products in 2020 and an additional US$200 billion in US goods within two years. If the news is true, US agricultural products may receive a further boost in the future. As a result, it is expected that the recent rise in foreign cotton may be stronger than that in domestic prices.
With the implementation of the first phase of the Sino-US agreement, cotton prices at home and abroad may receive a certain boost, but whether the domestic fundamental supply and demand structure can be improved will constrain the cotton market. final direction. The foreign cotton market may be stronger than the domestic one, and the price difference between domestic and foreign prices is expected to further narrow, which may help downstream cotton choices to tilt toward domestic use. Cotton prices may slowly fluctuate upward in the market outlook. As for the extent of the increase, it remains to be seen the mentality of various market segments and the actual digestion of cotton. </p
