According to data from the General Administration of Customs, China’s total cotton imports in March 2023 were approximately 70,000 tons, a decrease of 22.2% month-on-month and a year-on-year decrease of 64.8%, continuing the trend of sharp decline in cotton imports from January to February (cotton imports from January to February 2023 (a year-on-year decrease of 45.58%); in March, China imported approximately 140,000 tons of cotton yarn, a month-on-month increase of 55.56%, and a year-on-year increase of 16.67%. It not only completely reversed the sharp decline in cotton yarn imports from January to February, but also achieved strong year-on-year and month-on-month growth, which is in line with cotton The weakness in imports is in sharp contrast, showing a mismatch of “half sea water and half fire”.
The industry generally believes that cotton imports in March continued to be sluggish and deserted since 2023, because in the past month or so, foreign cotton far-month shipments and bonded cotton inquiries/transactions have been very slow, with a few in Qingdao, Zhangjiagang and other places. It is even difficult for trading companies to “open”. Only textile companies/middlemen who are in urgent need of “purchasing according to orders and buying as they are used” provide RMB resources at a fixed price. Cotton inventories in major ports continue to increase. The main reasons are: first, export orders in the first and second quarters of 2023 are mainly short orders, bulk orders, small orders, and urgent orders, and there is an obvious shortage of medium and long-term large orders; second, cotton textile enterprises/traders “buy up but not down” The sentiment is outstanding and the market is negative; third, the RMB exchange rate continues to depreciate; fourth, domestic and foreign cotton prices are still upside down and are still above 1,000 yuan/ton, etc. A textile company in Jiangsu said that U.S. cotton has begun to be “oversold” in 2022/23, and there are large differences in quality, grade and other indicators; while Brazilian cotton is not cost-effective, so it is not active in signing contracts for foreign cotton.
It is not surprising that cotton yarn imports picked up significantly in March. On the one hand, since the new export orders (including traceability) in March and April are mainly urgent orders and short orders, OEM companies and suppliers need to “quickly arrange orders and deliver fast” to purchase imported cotton spinning, weaving, Fabrics and ready-made garments take too long. In order to receive orders, weaving factories, clothing companies, etc. can only directly purchase port bonded and spot cotton yarn. On the other hand, since March, not only domestic demand but also export orders have affected 40S-60S medium and high-count cotton yarn. Consumer demand continues to grow, and cotton yarn quotations continue to rise (60S yarn generally rises by 1,000-2,000 yuan/ton). However, due to the low inventory of high-count yarns in domestic yarn mills, the supply is currently tight, so cloth factories and other terminals are reluctant to import. Inquiries/purchases for 50S and 60S cotton yarns are relatively active, and high-count yarns produced in India, Vietnam and other places are “all the hard work has come.” Of course, domestic and foreign cotton prices fell sharply in March, and the FOB/CNF quotations of cotton yarns from India, Vietnam, Pakistan and other producing areas continued to fall. The stabilization of domestic cotton yarns resulted in a significant narrowing of the inversion range of domestic and foreign cotton yarns, which was also an important factor stimulating a sharp rebound in cotton yarn imports. .
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