According to feedback from cotton trading companies in Qingdao, Zhangjiagang and other places, since early June, the total inventory of bonded + non-bonded cotton in major ports in China has stopped rising and declining, and the month-on-month decline in bonded cotton has been significantly higher than the decline in non-bonded cotton. The main products arriving and warehousing in Hong Kong are 2021/22 US cotton, 2020/21 Brazilian cotton and Indian cotton.
According to industry analysis, on the one hand, driven by the recent sharp decline in ICE cotton futures and the shift from depreciation to appreciation of the RMB exchange rate, some traders and cotton spinning companies with import quotas are willing to take the initiative to clear customs. On the other hand, due to the escalation of the import ban imposed by the United States on goods from the Xinjiang region and the recent inquiry/transaction situation of domestically imported cotton with cotton yarn, which is significantly better than that of Xinjiang cotton yarn, etc., the price difference transaction situation of cotton base at the port is slightly lower. Good (CF2209+basis).
In recent days, the main contract of ICE cotton futures has once again made an upward breakthrough, and the quotations of bonded cotton and cargo have increased significantly (in US dollars); while the Zheng cotton CF2209 contract continues to consolidate in the 20000-20500 range, and Xinjiang cotton in the mainland warehouse is more expensive than customs clearance. The price advantage of cotton/Brazilian cotton/Indian cotton has expanded, and the price inquiry of bonded cotton has cooled down.
It is understood that due to the recent large-scale and continuous rainfall in South Wales and New South Wales in Australia, not only has the harvesting, processing, and shipment of seed cotton been delayed by 1-2 months, but the cotton grade, quality indicators, impurity content, etc. may also be affected. Unable to meet the contract requirements of Chinese buyers, the Australian cotton purchase contract signed in the early stage may face implementation difficulties. On the one hand, some foreign businessmen and cotton traders suggest that textile companies suspend price inquiries and place orders for 2021/22 Australian cotton, waiting for the commodity inspection results and the shipping situation to improve; on the other hand, they negotiate with signed buyers to postpone delivery or even cancel the contract. Judging from the quotations, the shipment period of Australian cotton in 2021/22 is generally postponed to July/August and October/December, which is about 1-2 months later than in previous years.
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