China Cotton Network Special News: According to market feedback, from January to February 2022, Chinese buyers signed contracts and imported Indian cotton yarn continued to decline, and there is little hope of stopping the decline and rebounding in the short term.
It is understood that although the FOB/CNF quotations of Indian and Pakistani cotton yarns have been reduced by more than 10% recently, they are still in an “upside-down” state compared with domestic yarns. Judging from the survey, the CNF quotation of Indian C32 high-quality cotton yarn has generally been US$3.80-3.90/kg since early March. The direct cost after customs clearance and the quotation of domestic C32 yarn have narrowed significantly or even gradually moved closer than those in January and February. However, due to the current domestic large-scale Some cotton mills have insufficient new orders, gauze inventory rates continue to rise, and capital flows are tight. As a result, cotton spinning mills have increased black-box operations, significantly enlarging profits and bargaining space, and the “inversion” range of internal and external markets has briefly contracted and then expanded again.
At the same time, in the first quarter of 2022, the volume of orders placed by my country’s export cotton textiles and clothing companies is relatively low. In addition, Chinese companies are worried about the impact of factors such as the U.S. government launching a new round of trade investigations and the Russian-Ukrainian conflict causing another rise in sea freight. , Chinese weaving companies and traders have reduced their purchases of imported cotton yarn, and Indian cotton yarn is no exception.
In addition, due to the rapid recovery of orders and production capacity of Indian yarn mills in the fourth quarter of 2021, some manufacturers have even scheduled orders until April/May 2022. Therefore, buyers are required to place orders 2-3 months in advance and pay contract deposits, while China Buyers are not able to release their negative concerns about the escalating conflict between Russia and Ukraine, the Federal Reserve’s interest rate hike in March, the difficulty in achieving the second phase of the Sino-US trade agreement, and the resurgence of the COVID-19 epidemic. Therefore, they are less enthusiastic about signing contracts for yarn cargoes shipped from India and Pakistan.
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