Since April last year, the commodity futures Zhengzhou Cotton Index has been rising, with an increase of more than 40%. At the “2021 China International Cotton Conference” held recently, guests attending the meeting believed that China has become the world’s largest textile and apparel industry center and supply chain hub, and has a huge consumer market. my country’s cotton consumption has ranked first in the world in recent years; The cotton textile supply chain has returned to normal, and textile companies have maintained high operating rates. It is expected that the overall spinning production capacity will rebound in 2021. The tight balance between cotton supply and demand is the general trend, and we are optimistic about the market outlook.
Cotton yield increased by 68.5% in 20 years
As of June 16, China’s cotton price index (3128B) The annual average price is 14,968 yuan/ton, a year-on-year increase of 19.2%; the annual average price of the main contract of Zheng cotton futures is 14,895 yuan/ton, a year-on-year increase of 19.6%. At the same time, the international cotton price fluctuated greatly. On June 16, the Cotlook A index was 95.60 cents/pound, down 2.90 cents/pound from the year’s high; the annual average price was 84.54 cents/pound, up 18.6% year-on-year.
The settlement price of the main ICE futures contract was 85.95 cents/pound, down 7.74 cents/pound from the year’s high; the average annual settlement price was 78.4 cents/pound, up 25.9% year-on-year. Wang Jianhong, deputy director of the Agricultural Materials and Cotton and Linen Bureau of the All-China Federation of Supply and Marketing Cooperatives and vice president and secretary-general of the China Cotton Association, said that since China joined the WTO, the cotton industry has undergone great changes. In 2001, my country’s cotton yield per unit area was 73.8 kg/mu. In 2020, the yield per unit area has reached 124.3 kg/mu, an increase of 68.5% in 20 years. “The textile industry was the first industry in my country to open up to the international market, and it is also my country’s fastest-growing and most developed industry in the international market.” Wang Jianhong said that my country’s textile and clothing exports currently account for 34% of the world’s total. In 2020, China’s textile and apparel foreign trade totaled US$319.88 billion, an increase of 3.75 times compared with 2001. Among them, exports amounted to US$296.23 billion, an increase of 4.54 times compared with 2002. In 2020, my country’s yarn output was 26.183 million tons and cloth output was 46.03 billion meters, an increase of 244.2% and 58.7% respectively compared with 2001.
In the past two decades, China has become the world’s largest textile and apparel industry center and supply chain hub, and has a huge consumer market. Wang Jianhong introduced that in the past fifteen years, except for 2019, my country’s cotton consumption has basically remained at 8 million to 10 million tons, ranking first in the world. With the rapid development of the textile and garment industry, the demand for cotton has gradually increased, and the gap between production and demand has existed for a long time. Imported cotton has become an effective supplementary channel for my country. In 2012, the import volume reached a record high of 5.14 million tons. Ye Jianchun, chief engineer of the China Cotton Textile Industry Association, said that judging from the overall situation from January to May, the cotton spinning situation is very good, the operating rate has greatly rebounded, and the overall spinning production capacity is expected to rebound this year.
International cotton prices continue to recover
International cotton prices have shown a strong recovery since April 2020 situation. Michael Edwards, chairman of British Courttruck Co., Ltd., said that the international cotton price has greatly exceeded many people’s expectations, but this rebound process is not limited to cotton, but almost all agricultural products and industrial commodities have experienced a significant recovery, “With the The cotton textile supply chain has returned to normal, textile mills have become profitable again in terms of yarn sales, and cotton consumption has also begun to show a positive trend.” According to the United States Department of Agriculture (USDA) report forecast, as of 2021-2022, global cotton will The ending inventory was 19.443 million tons, a decrease of 816,000 tons from 2020-2021. The global ending inventory consumption ratio was 72.9%, a decrease of 5.9 percentage points from 2020-2021. Chen Minghong, deputy general manager of China Textile Group Co., Ltd., said that from the perspective of production, due to the impact of grain and cotton price comparisons, the global cotton planting area has declined overall, but with the unit yield unchanged, global cotton production still remains at 25 million – 26 million tons range. Among them, China’s output in the new year is expected to decrease year-on-year, India’s output is expected to be basically the same, the United States’ output will increase due to improved weather, Brazil’s output will decrease, and Pakistan’s output will recover. Overall, global cotton production will remain at or slightly above 26 million tons.
The overall operating rate is relatively high
The China Cotton Association released the cotton textile report on June 17 The company’s survey report in May stated that although the textile market began to enter the traditional off-season in May, yarn sales were generally smooth and the off-season characteristics were not obvious. Some varieties, such as 32-count, were still in tight supply, and textile companies maintained high operating rates. The epidemic is still severe in India and other regions, and some orders have been transferred to China, which has supported demand. A survey of more than 90 designated textile companies across the country by the China Cotton Early Warning System showed that raw material inventories of textile companies increased slightly in May, textile output increased slightly from the previous month, and yarn inventories and cloth inventories decreased. In terms of textile output, orders from some textile companies in May have been scheduled to July. Yarn profits are better, shipments are smoother, and the overall operating rate is relatively high. Output is basically the same as last month, up 3.7% year-on-year. Among them, pure cotton yarn accounted for 62.5%, a decrease of 2.1 percentage points from the previous month; blended yarn and chemical fiber yarn accounted for 37.5%, an increase of 2.1 percentage points from the previous month. The yarn inventory of textile enterprises is 8.12 days, a decrease of 1.93 days from the previous month. Gray cloth inventory is 15.42 days, a decrease of 1.36 days from the previous month. In terms of cotton yarn prices, domestic and foreign cotton yarn prices increased in May. The average price of domestic 32-count pure cotton yarn was 25,000 yuan/ton, an increase of 653 yuan/ton from the previous month, an increase of 2.68%, and an increase of 6,259 yuan/ton from the same period in 2020. The increase was 33.4%; the average price of imported 32-count pure cotton yarn was 24,832 yuan/ton, an increase of 440 yuan/ton from the previous month, an increase of 1.8%, and an increase of 1.8% from 2020.In the current period, it rose by 5,990 yuan/ton, an increase of 31.8%. Zhang Xian, vice president of the China Chamber of Commerce for Import and Export of Textiles, said that in addition to the low base last year, the reason for growth is also due to the relatively good recovery of major consumer markets. Among the entire textile and clothing imports, cotton yarn has long been the largest imported commodity, and the import growth momentum this year is particularly obvious. The reasons are: first, the rapid decline in cotton yarn consumption in countries such as India and Pakistan; second, the appreciation of the import exchange rate, which is conducive to imports.
The degree of digitalization continues to increase
Yang Baofu, deputy general manager of the National Cotton Trading Market, said that with the future With the continuous development of science and technology, the digitalization of the cotton industry will continue to increase. The planting process will achieve the selection and breeding of excellent varieties, thereby achieving regionalization of varieties and large-scale planting; the processing process will achieve refined processing, and the processing quality will be controlled throughout the process; the inspection process will remove manual labor and realize all automation, further enhancing the credibility of cotton notarization inspection Improvement; the smart logistics platform in the warehousing and logistics link will be more complete and the operation efficiency will be more efficient; the transaction model in the sales link will be further upgraded, thereby facilitating transactions and reducing costs; the textile link will further achieve accurate cotton allocation, and at the same time achieve traceability of cotton quality, achieving Cultivation of cotton varieties with users as the goal will truly enhance the competitiveness of my country’s cotton. “With the application of digitalization and the development of informatization in the entire industry chain, costs will be further reduced and efficiency will be improved, thereby promoting the quality and efficiency improvement of the entire cotton industry.” Yang Baofu said. Chen Minghong believes that there are five points that need to be paid attention to in the market outlook: first, the weather conditions of the major cotton-producing countries in the northern hemisphere; second, whether the recovery of the industrial chain and transmission can be maintained; third, the dynamics of China’s cotton reserve policy; fourth, the purchase and sale of India’s CCI reserves in the new year; The fifth is the impact of changes in the macro environment and the overall trend of commodities on the operation of the cotton market. Fang Tao, chairman of Zhejiang Huigu Products Co., Ltd., believes that the current structural contradictions in agricultural products need to be focused on. Judging from the domestic cotton supply and demand balance sheet, the general trend of tightening supply and demand is generally recognized, and the market outlook is generally optimistic. In the third and fourth quarters, we should pay attention to the repricing after the normalization of monetary policy.
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