[Features of this month] Domestic cotton price rises, international cotton price falls Unit: Yuan/ton, % Note: The domestic price is the sales price of 3128B grade cotton in China Cotton Price Index (CC Index), and the international price is the price index of imported cotton (FC Index) CIF after-tax price of M-grade cotton (below sliding standard tax).
[Late-stage trend] In the domestic market, the progress of lint sales has been significantly accelerated, and the domestic cotton supply is tight. The new orders of textile enterprises are sufficient, and the demand in the domestic market continues to improve. It is expected that the price of cotton will fluctuate slightly. In the international market, the global economic recovery is sluggish, cotton consumption is declining, and supply and demand are generally loose. It is expected that short-term cotton prices will be weak and volatile.
[Details]
(1) Domestic cotton prices rose month-on-month and fell year-on-year. The procurement of cotton raw materials was active, and domestic cotton prices rose. In May, the average monthly price of domestic 3128B grade cotton was 16,365 yuan per ton, a month-on-month increase of 5.0% and a year-on-year decrease of 26.2%. The monthly settlement price of Zhengmian futures main contract (CF309) was 15,739 yuan per ton, up 3.0% month-on-month and down 25.8% year-on-year.
(2) International cotton prices continued to fall. This month, the agreement reached in the U.S. debt ceiling negotiations will help ease the current risk aversion sentiment in the global market. The probability that the Fed will continue to raise interest rates in order to overcome inflation will increase; superimposed on the U.S. Department of Agriculture (USDA) U.S. cotton contract shipment data has deteriorated, etc. Affected by various factors, international cotton prices continued to fall. In May, the average monthly price of the Cotlook A index (equivalent to domestic 3128B grade cotton) was 93.85 cents per pound, down 1.4% month-on-month and 43.0% year-on-year.
(3) The price difference between domestic and foreign cotton expanded. The CotlookA index (equivalent to domestic 3128B grade cotton) is equivalent to RMB 14,445 per ton, which is 1920 yuan per ton lower than the China Cotton Price Index (CC Index) 3128B grade, and the price difference has expanded by 778 yuan from last month. The average monthly price of imported cotton price index (FC Index) M grade (equivalent to domestic 3128B grade cotton) is 94.08 cents per pound, and the 1% tariff discounted CIF price is 15,891 yuan per ton, which is 474 yuan lower than the domestic price. An increase of 24 yuan from the previous month; the price after the sliding standard tax is 15,936 yuan per ton, which is 429 yuan lower than the domestic price, and the price difference is 173 yuan smaller than that of the previous month.
(4) Cumulatively from January to April, cotton imports and textile and apparel exports decreased year-on-year. According to customs statistics, my country imported 84,000 tons of cotton in April, a month-on-month increase of 16.0% and a year-on-year decrease of 51.5%. From January to April, my country imported a total of 382,000 tons of cotton, a year-on-year decrease of 51.7%. In April, my country's textile and clothing exports were 25.658 billion US dollars, a decrease of 2.8% from the previous month and an increase of 8.8% from the same period last year. From January to April, my country's textile and clothing exports totaled 92.898 billion US dollars, a year-on-year decrease of 3.1%.
(5) The spinning volume decreased year-on-year, and the yarn price decreased month-on-month. According to the data from the National Bureau of Statistics, from January to April, my country's yarn output was 7.489 million tons, a year-on-year decrease of 4.3%. Textile enterprises have insufficient orders, the production and sales ratio of yarn and cloth has dropped, and the price of yarn has dropped. According to the "China Cotton Industry Inventory" data, at the beginning of May, the yarn production and sales rate of the sampled enterprises was 95.6%, a month-on-month decrease of 6.5 percentage points; the cloth production and sales rate was 97.1%, a month-on-month decrease of 3.8 percentage points. In May, the average price of 32 pure cotton carded yarns of the main representative varieties was 22,921 yuan per ton, a decrease of 1.0% month-on-month and a year-on-year decrease of 20.4%.
(6) The global cotton production, consumption and trade volume were basically flat month-on-month. The International Cotton Advisory Committee (ICAC) predicted in May that in 2022/23, global cotton production will be 24.55 million tons, which is basically the same as last month; consumption is 23.79 million tons, which is 7,600 tons lower than last month; An increase of 4,000 tons from the previous month; the unexpired inventory was adjusted to 20.19 million tons, an increase of 7,000 tons from the previous month; the global inventory-to-consumption ratio was 84.3%.
(7) It is expected that domestic cotton prices will rise in the short term, while foreign cotton prices will run weakly. Domestic market: The progress of lint sales has been significantly accelerated. National cotton market monitoring data show that as of May 26, the national sales rate was 90.2%, an increase of 36.1 percentage points year-on-year. The new orders of textile enterprises increased, and the domestic demand market improved. It is expected that domestic cotton prices will fluctuate slightly in the near future. International market: The recovery of the global economy is sluggish, the growth of consumer demand for textile and apparel products is slowing down, and the overall supply of cotton is loose. It is expected that the international cotton price will run weak in the short term.
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