[Features of this month] Cotton prices both at home and abroad have risen month-on-month
[Late-stage trend] In the domestic market, some cotton areas experienced high temperature weather, and the weather speculation continued to heat up, forming a support for cotton prices. The downstream domestic and foreign demand markets for textiles have not improved significantly. In the international market, weather disturbances in major cotton-producing countries such as the United States and India have intensified, and it is expected that international cotton prices will fluctuate strongly in the short term.
[Details]
(1) Domestic cotton prices continued to rise. The downturn in the downstream textile market has not improved, but cotton stocks continue to decline, and high temperature weather has caused concerns about new cotton production reduction, and cotton prices have risen significantly. According to data from the China Cotton Information Network, at the end of June, the national cotton commercial inventory was 2.897 million tons, a decrease of 22.2% from the same period last year. According to the "China Cotton Industry Survey Report" data, the national cotton industry inventory in early July was 511,000 tons, a year-on-year decrease of 19.8%. In July, the monthly average price of domestic 3128B grade cotton was 17,724 yuan per ton, up 2.7% month-on-month and 5.7% year-on-year; the monthly settlement price of the main contract of Zheng Cotton Futures (CF401) was 17,220 yuan per ton, up 3.9% month-on-month and 15.5% year-on-year .
(2) The international cotton price remained flat and rose slightly. This month, major cotton producing countries such as the United States, China and India have been affected by high temperature weather, triggering market concerns about global supply in the new year, and international cotton prices have risen. In July, the average monthly price of the CotlookA index (equivalent to domestic 3128B cotton) was 93.10 cents per pound, up 0.7% month-on-month and down 28.9% year-on-year.
(3) The price difference between domestic and foreign cotton has narrowed. The CotlookA index (equivalent to domestic 3128B grade cotton) is equivalent to RMB 14,735 per ton, which is 2989 yuan per ton lower than the China Cotton Price Index (CCIndex) 3128B grade, and the price difference is 56 yuan smaller than last month. The average monthly price of imported cotton price index (FCIndex) M grade (equivalent to domestic 3128B grade cotton) is 94.37 cents per pound, and the 1% tariff discounted CIF price is 16,645 yuan per ton, which is 1,079 yuan lower than the domestic price. Last month, it was reduced by 425 yuan; the price after sliding standard tax was 16,787 yuan per ton, which was 937 yuan lower than the domestic price, and the price difference was 408 yuan smaller than that of last month.
(4) Cotton imports and textile and clothing exports both decreased year-on-year. According to customs statistics, my country imported 83,800 tons of cotton in June, a decrease of 23.5% month-on-month and a decrease of 48.6% year-on-year. From January to June, my country imported a total of 575,300 tons of cotton, a year-on-year decrease of 49.3%. In June, my country's textile and clothing exports were 26.99 billion US dollars, an increase of 6.6% from the previous month and a decrease of 14.4% from the same period last year. From January to June, my country's textile and clothing exports totaled 145.208 billion US dollars, a year-on-year decrease of 7.3%.
(5) The amount of spinning increased month-on-month, and the price of yarn rose month-on-month. According to the data of the National Bureau of Statistics, in June, my country's yarn output was 1.998 million tons, an increase of 2.9% from the previous month and a decrease of 2.9% from the same period last year. Accumulated from January to June, my country's yarn output was 11.031 million tons, a year-on-year decrease of 3.8%. The production and sales ratio of gauze in textile enterprises has declined, but the price of yarn has risen due to the increase in raw material prices. According to the "China Cotton Industry Inventory Survey Report" data, in early July, the yarn production and sales rate of sample survey enterprises was 86.4%, a decrease of 8.4 percentage points from the previous month; the cloth production and sales rate was 94.2%, a decrease of 1.4 percentage points from the previous month. In July, the average price of 32 pure cotton carded yarns of the main representative varieties was 23,955 yuan per ton, up 0.2% month-on-month and down 9.5% year-on-year.
(6) Global cotton production and consumption increased. The International Cotton Advisory Committee (ICAC) predicted in July that in 2023/24, global cotton production will be 26.53 million tons, an increase of 7.5% over the previous year; consumption will be 24.41 million tons, an increase of 2.2%; ending inventory will be 22.32 million tons, an increase of 10.4%; The inventory-to-consumption ratio was 91.4%, an increase of 6.8 percentage points.
(7) Cotton prices at home and abroad are expected to fluctuate strongly. Domestic market: On July 18, China Reserve Cotton Management Co., Ltd. issued the "Announcement on the Sales of Central Reserve Cotton in 2023". On July 21, the National Development and Reform Commission issued a sliding tax quota of 750,000 tons for non-state-owned cotton imports. And without restricting the trade mode, the short-term supply pressure of cotton tends to ease. Cotton has entered a critical period of growth, and the market continues to heat up speculation about bad weather, forming a certain support for cotton prices. The new orders of textile enterprises are insufficient, and the domestic and foreign demand markets have not improved significantly. It is expected that the domestic cotton price may fluctuate at a high level in the short term. International market: Worries about the global economic recession have led to a decline in cotton consumption demand. In the new year, cotton production exceeds demand and overall supply is loose. However, weather disturbances in major cotton-producing countries such as the United States and India have increased, and China’s additional issuance of sliding tax quotas has boosted market expectations. , it is expected that short-term international cotton prices will fluctuate strongly
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