According to statistics from the General Administration of Customs, China’s cotton import volume in November 2021 totaled approximately 100,000 tons, a year-on-year decrease of 51%. It was also lower than the total import volume in the same period in 2019 (105,100 tons), but it was larger than the cotton import volume in October. An increase of 37,400 tons, a month-on-month increase of 59.74%. Among them, U.S. cotton, Indian cotton, and Brazilian cotton still firmly occupy the top three positions. Although the import volume of Australian cotton, West African cotton, and cotton from other origins continues to be weak, their proportion has rebounded.
Why did cotton imports in November “halve” year-on-year? Industry analysis mainly has the following reasons:
First, the main contract of ICE cotton futures in November continues to oscillate at a high level in the range of 110-118.50 cents/pound (it fell below 110 cents/pound, 107 cents/pound and other integer marks on November 30), and the domestic and external quotations of imported cotton are obvious. It is higher than the psychological price of cotton spinning enterprises and traders.
Second, the destocking effect of bonded U.S. cotton and Brazilian cotton at ports was very significant in October/November. China National Textile Group/China National Textile Group Co., Ltd.’s efforts to purchase high-quality foreign cotton spot and invest resources in the cotton spinning market have also continued to slow down. The remaining bonded cotton batches Problems such as large quantity, large quality differences and high Brazilian cotton linters are also more prominent than in the previous period.
Third, entering November, high-quality and high-grade Xinjiang cotton in 2021/22 has been gradually moved to mainland consumption areas for sale. Coupled with the continuous falling price of Zheng cotton CF2205 contract in late November, domestic cotton-related companies have actively priced and based on prices. There is a gap in inventory replenishment, and foreign cotton inquiries and shipments have slowed down significantly.
Fourth, since September 2021, as the production capacity of textile and garment enterprises in Bangladesh, Vietnam, Indonesia, India and other countries has gradually returned to pre-epidemic levels and sea freight rates from China to major ports in Southeast Asia have skyrocketed, orders from Europe, the United States, Japan, South Korea and other countries have returned to Southeast Asia. The trend is very obvious. The consumer demand of my country’s textile and garment enterprises for imported cotton and imported cotton yarn is declining rapidly.
Fifth, the additional sliding tariff cotton import quotas issued in 2021 are not very easy to use, and cotton import companies and middlemen have few opportunities to enter the market. Therefore, transactions between buyers and sellers are still based on the 1% tariff quota; in addition, some cotton spinning mills above designated size Contracts have been signed for Brazilian cotton and US cotton for the November/December shipping dates, so the 1% quota can be described as “raising the budget and making it available”.
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