According to cotton trade feedback from Zhangjiagang, Qingdao and other places, as of late December, cotton stocks in China’s main ports for 2019/20 and 2020/21 have been at relatively low levels. In particular, bonded US cotton resources are scarcer than Indian cotton and Brazilian cotton. International Cotton merchants and cotton import companies focus on selling 2021/22 U.S. cotton with shipping dates from January to June 2022.
It is worth noting that in the past week or so, due to the oscillation rebound of ICE and Zheng Cotton, the unsatisfactory order intake of cotton textile companies in the first quarter of 2022, and the expansion of production and sales losses of cotton spinning mills, non-bonded cotton inquiries and shipments have The volume continues to slow down compared with the first and middle of December, and the inventory has rebounded significantly. In addition, the arrival and storage volume of Brazilian cotton in Hong Kong in 2020/21 has recently shown a slight increase, with M 1-1/8 (strong 28GPT) supply being the main source. Several cotton spinning mills and cotton traders reported that Brazilian cotton with medium and low quality indicators has a high lint rate, low uniformity, and factors such as rising sea freight, tight shipping space, or failure to ship as scheduled require purchasers to pay close attention. Some cotton-related companies said that the quantity of U.S. cotton purchased, shipped, and arrived in Hong Kong by Chinese companies from January to March 2022 may not meet expectations (the first quarter is traditionally the climax of U.S. cotton exports), and the growth of bonded U.S. cotton at ports is likely to decline year-on-year. (The shipment of U.S. cotton at some ports is delayed and the problem of cargo accumulation is still severe). The main reasons are as follows:
First, although judging from the commodity inspection situation, the length, strength and other indicators of US cotton in 2021/22 have improved compared with the previous two years, the micronaire value is lower than the previous year, which is not conducive to spinning high-count cotton yarn; second, in 2020/ In 2021, the cotton planting area and total output of Brazilian cotton, Australia and other countries are expected to increase significantly, fully competing with US cotton. The U.S. Agricultural Counselor’s report shows that Brazil’s cotton production is expected to reach 2.74 million tons in 2021/22, a year-on-year increase of more than 10%; however, Brazilian CONAB and other institutions estimate that Brazil’s cotton production may increase by 20% year-on-year.
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