According to feedback from cotton traders in Qingdao, Zhangjiagang, Shanghai and other places, cotton stocks in China’s major ports have shown a steady and slightly increasing trend since January. Among them, cotton stocks in warehouses in Huangdao, Jinan and Jiaozhou have increased slightly, while those in Shanghai, Zhangjiagang, In Nanjing, Nantong, Jiangyin and other places, the overall cotton exports are greater than the imports, and inventories continue to fall. On the one hand, the arrival/warehousing of Brazilian cotton and Australian cotton in 2021/22 has increased in November and December, and is concentrated in warehouses in Qingdao and surrounding areas; on the other hand, since the fourth quarter of 2022, the volume of Indian cotton in Zhangjiagang and other Jiangsu and Zhejiang ports has increased. Inventories continue to decline, but the amount of cotton arriving at the port and entering the warehouse in 2021/22 is very small.
A large cotton trading company stated that based on resource quotations from some international cotton companies and domestic traders, it is estimated that by mid-January 2023, the total cotton inventory in China’s major ports may be 185,000-190,000 tons (bonded + non-bonded) , although India’s cotton inventory is far behind that of US cotton and Brazilian cotton, it is still expected to rank third.
Judging from the survey, as ICE cotton futures have risen sharply in the past two days, with the main contract exceeding 85 cents/pound, the price difference between domestic and foreign cotton has once again expanded. Coupled with the approaching Spring Festival, the operating rate of cotton spinning mills in Shandong, Jiangsu, Henan and other places has peaked The decline in prices, the increase in early holidays, and the recovery of export traceability orders in the first quarter of 2023 are not very satisfactory. Therefore, inquiries and shipments of bonded cotton or customs-cleared cotton are not active at the port, and the performance of US cotton and Australian cotton is relatively deserted.
It is worth noting that since December, the RMB has continued to appreciate significantly (on January 9, the central parity rate of RMB against the US dollar was reported at 6.8265, the highest since August 22, 2022), and the cost of imported foreign cotton has dropped significantly. Therefore, some cotton Trading companies believe that with the gradual release of 894,000 tons of cotton import quotas within 1% tariff in 2023 around the Spring Festival and the comprehensive optimization of China’s epidemic prevention and control policies, not only the enthusiasm of clothing companies and buyers in Europe, the United States, ASEAN and other countries for placing orders has continued to recover, but also China The confidence of textile and garment enterprises in accepting and arranging orders has also continued to rise. Coupled with the full implementation of government support measures and the rising expectations of the central bank’s reserve requirement and interest rate cuts, textile enterprises and middlemen are expected to increase their expectations for the January/February/March shipping schedule. Inquiry/contract purchasing efforts for U.S. cotton, African cotton, Brazilian cotton, etc.
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