According to feedback from several Indian cotton processing companies and international cotton merchants, since early April, the CCI sell-off in India has not only continued to reduce the number of listings, but also made inquiries and transactions increasingly deserted. Cotton textile mills and traders have a strong wait-and-see mood. The daily transaction volume of CCI resource sales has dropped significantly compared with February and March, showing signs of “starting at the beginning but ending at the end”.
According to statistics, as of mid-April, CCI cotton inventory was still close to 4.45 million bales, but the old cotton in 2018/19 and 2019/20 was less than 60,000 bales (due to The advantages of price, quality, and low moisture content are more favored by Indian domestic yarn mills). The sell-off of Indian cotton in 2020/21 has been “cold treatment” by buyers.
CCI cotton’s sales progress has “stepped on the brakes” mainly for the following reasons:
First, with the decline in sales in the past month Each contract of ICE cotton futures oscillates in a wide range and adjusts upwards repeatedly. The benchmark sales price of CCI medium and high-quality cotton rises in a “straight line”. MCX futures and domestic spot prices in India also continue to be in an upward channel. Compared with private enterprises and U.S. cotton, CCI cotton and the lack of “cost-effectiveness” of Brazilian cotton;
Secondly, the 2020/21 season will be greatly affected by rainfall and epidemics in the main cotton-producing areas, coupled with the implementation of relevant government departments. Due to pressure, the CCI has lowered the procurement standards for seed cotton in Telangana, Maharashtra, Gujarat and other producing areas (mainly moisture content, color grade, horse value and other indicators), resulting in cotton grade, quality and consistency being higher than before. Two years of decline;
Third, the domestic COVID-19 epidemic in India suddenly rebounded wildly, and buyers from China, Bangladesh, Vietnam and other countries cautiously signed contracts to purchase CCI cotton. On the one hand, buyers are worried that the epidemic will be imported with cotton; on the other hand, they are worried about the impact on land transportation, warehousing, and shipping of Indian cotton; fourth, Indian private ginners, traders and CCI selling has created fierce competition, and it is not uncommon for “the tiger’s mouth to grab food”. According to statistics, since mid-January, as the prices of domestic seed cotton and lint cotton in India have continued to rise, and the market price has gradually caught up with and exceeded the MSP, CCI acquisition volume has gone from bad to worse. Some acquisition centers have had to close early, and private enterprises and individual ginners have Having become the main body of acquisition, processing, and sales, private enterprises have formed an “encirclement and suppression” campaign against CCI with the advantages of flexible pricing, multiple payment methods, and door-to-door delivery of products. </p
