According to customs statistics, my country imported 170,000 tons of cotton in May 2021, a month-on-month decrease of 26.2%, and a year-on-year increase of 147.3%; from January to May 2021, the cumulative imports were 1.3712 million tons, a year-on-year increase of 70%; in 2020/21 ( 2020.9-2021.5) my country imported a total of 2.3409 million tons of cotton, a year-on-year increase of 91.8%. In May, US cotton, Brazilian cotton and Indian cotton ranked top three again, while Australian cotton inquiries and transactions showed a bottoming out trend.
Why did my country’s cotton imports “press the brakes” in May? Industry analysis is mainly affected by the following factors:
First, the May ICE cotton futures went out of a “V” shaped market, with a relatively wide oscillation range (the intraday low was 80.99 US dollars). cents/pound, with a high of 88.50 cents/pound), and buyers have a strong wait-and-see atmosphere; second, the 1% tariff cotton import quota for cotton textile mills and importers is extremely tight, and small and medium-sized cotton trading companies have basically been eliminated; third, sea freight As prices continue to surge and containers are extremely tight, China’s cotton-consuming enterprises are paying attention to shipments of US cotton, Brazilian cotton, Indian cotton and other goods in May/July and placing fewer orders, fearing that contracts cannot be fulfilled in time; fourth, the epidemic prevention and control has escalated, and various Main ports have strengthened measures such as virus eradication and warehousing controls, resulting in long queues for customs clearance and warehousing at ports such as Qingdao and Zhangjiagang, which has affected foreign cotton imports to a certain extent; fifth, the RMB exchange rate continued to appreciate in May, setting a new record in 2018 At a new high since the beginning of the year, cotton import companies are increasingly worried and panic is rising. On May 31, the central bank authorized the China Foreign Exchange Trading Center to announce that the central parity rate of the RMB against the U.S. dollar was reported at 6.3682 yuan. Regulatory authorities made intensive statements, requiring enterprises and financial institutions to actively adapt to the two-way fluctuations in exchange rates, manage expectations, and resolutely crack down on all kinds of exchange rate fluctuations. The behavior of maliciously manipulating the market and creating unilateral expectations has significantly reduced expectations for RMB appreciation.
A large cotton import company in Qingdao stated that although bonded cotton stocks in China’s major ports have continued to remain high recently, ICE’s main contract has once again fallen below 85 cents/pound, and cotton yarn quotations remain unchanged. However, since June, cotton import volume has continued the pattern of steady decline in May. Textile enterprises mainly purchase foreign cotton by “pointing prices” at low prices, while some traders have raised their base prices on the premise that ICE and Zheng Cotton have jointly declined. The difference is also resisted by cotton spinning mills and downstream sales terminals. </p
