According to feedback from several international cotton merchants and importing companies, the continuous rise in ICE cotton futures, the slow progress of monsoon rains in India have led to a significant lag in cotton sowing progress, and the full resumption of production in the cotton textile and apparel industry after the epidemic improved, triggering a rapid rebound in cotton consumption demand, etc. With the positive push, the CCI’s lowest auction price has risen again in recent days (since June 22, CCI’s lowest price has been “four consecutive positives”). The bullish sentiment of private ginners and cotton traders continues to rise, and the phenomenon of reluctance to sell is not uncommon. .
A cotton company in Gujarat said that on the one hand, CCI cotton inventory resources have been significantly reduced so far, and there is almost no pressure to rotate out 100% of new cotton before it is launched. Therefore, the Indian government has The confidence continues to increase the CCI rotation floor price; on the other hand, the MSP price in 2021/22 has increased by about 200 rupees/quintal; with the support of a double drop in India’s cotton planting area and total output expectations in 2021, there is basically no room for correction in the CCI rotation floor price .
An international cotton trader said that another key factor that caused India’s domestic cotton futures and CCI’s bottom price to be “risk-limited and at a dangerous peak” is that since February 2021, India A 10% tariff on imported cotton (including a 5% basic tariff and a 5% surcharge) has resulted in a significant increase in the cost of cotton imports from the United States, Brazil, Central Asia, Africa and other producing areas, forcing Indian cotton spinning mills to prioritize procurement, Digest domestic cotton.
Recently, as textile mills resume full operation, demand for imported cotton has rebounded sharply. The South India Textile Mills Association and other organizations have asked the government to cancel the 10% cotton import tariff, but Private cotton companies in Gujarat, Maharashtra and other places generally believe that it is unlikely that India will cancel the 10% cotton import tariff in the second half of 2021, or it is just wishful thinking of cotton textile mills. First, the government will From the perspective of protecting the interests of farmers and cotton growers, the willingness to cancel tariffs is not strong; secondly, the current domestic cotton price in India has a very weak competitive advantage compared to ship cargo and bonded medium and low-quality US cotton/West African cotton/Brazilian cotton. , the cancellation of the 10% tariff protection, under the turbulent impact of imported foreign cotton, Indian cotton is in a more dangerous situation; third, CCI’s acquisition volume may increase sharply in 2021/22, which will not only put great pressure on warehousing, but also occupy a very large amount of acquisition funds. protrude. </p
