According to feedback from some cotton yarn traders and weaving companies, in response to the recent sharp rise in Indian domestic seed cotton (the price of seed cotton in some parts of India has soared to 9,600 rupees/quintal), S-6 spot, and MCX futures quotations, Indian OE yarn, The overall price of carded and combed yarn has risen rapidly, which has triggered continuous adjustments in the prices of cotton yarn shipments, bonded yarn, and customs-cleared yarn from India, Pakistan and other producing countries. The increase in domestic cotton yarn has been significantly weaker than that of imported yarn, resulting in a significant expansion of the “upside-down” range of domestic and foreign cotton yarn quotations. Yarn trading fell into a deserted situation.
A large textile import and export company in Guangdong stated that the price of Indian cotton has been rising since the new cotton was launched on the market in 2020/21. In addition to the bottoming out of CCI reserve stocks, the slow launch of new cotton due to weather and epidemics and other factors, the Indian government has not withdrawn its restrictions on imports. In addition to the positive effects of a 10% tariff on cotton and rumors of restrictions on cotton exports, Indian cotton textile/apparel companies have had smooth mid- and long-term orders and order placements since the fourth quarter of 2021. The strong rebound in cotton consumer demand is the key to triggering a sharp rise in Indian cotton futures. .
Judging from the survey, the reason for the sharp rise in FOB/CNF/CIF quotations of cotton yarns in Indian spinning mills is not only the “flat take-off” of seed cotton and lint prices, but also the goods and services tax (GST) or the effect from May 1, 2022. The increase in % to 12% (spinning mills passively raised their quotations in response) and the full recovery of the weaving/garment industry production capacity/orders in Bangladesh, Vietnam, Indonesia and other countries are directly related to the continued growth of contract purchases of Indian cotton yarn and other factors.
However, judging from the reflections of Chinese traders and weaving enterprises, since the price of C32 high-quality bleached Indian yarn, C40S bleached Indian yarn and domestic yarn of the same quality after customs clearance has reached about 3,500 yuan/ton and 4,000 yuan/ton, downstream prices Enterprises and consumer terminals simply cannot bear and digest it, so inquiries/shipments of cargo and spot Indian cotton yarn at ports have basically come to a standstill.
A fabric factory in Shaoxing, Zhejiang said that on the one hand, the current CIF price difference between C32S high-quality Indian cotton yarn and Vietnamese yarn has widened to 0.15-0.30 US dollars/kg. Not only is the price uncompetitive, but the quality and stability of the cotton yarn have no advantages; on the other hand, due to the influence of India Affected by the sharp increase in cotton yarn FOB and CNF quotations, some cotton yarn procurement contracts signed between September and December may face great pressure due to Indian yarn mills/exporters delaying delivery, increasing prices or even breaching the contract. Fabric mills and traders have to Increase the purchase of cotton yarn from Vietnam, Pakistan, Uzbekistan, Indonesia and other places (since mid-December, export order inquiries/placements have increased, but mainly non-Xinjiang cotton orders).
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