Last week, the international spot market transactions were active, and the main purchases still came from China. The market expects this week’s weekly US cotton export report to be another high number.
That week, China actively purchased US cotton and Brazilian cotton. The main reason was that the prices of imported cotton and domestic cotton increased. The first choice was US cotton, followed by Brazilian cotton. The loading period is In the first and second quarters of 2022, textile mills and trading companies will make large purchases. Australian cotton new flowers continue to be traded in various places, and sales are particularly good in Vietnam and South Korea. Vietnamese textile mills continue to import Australian SM 1-5/32 grade cotton in large quantities at a fixed price, with a transaction price of 115-116 cents/pound, loaded The period is from June to August 2022. ICE futures fluctuated repeatedly last week, with the overall Australian cotton basis spread around 1,200. South Korea mainly uses the ON-CALL method to purchase Australian cotton.
In addition, Turkey’s import intensity is good, but the lira exchange rate fell last week, which affected the transaction. Bangladesh purchased Indian cotton. Except for Bangladesh’s import of Indian cotton, other international spot transactions are ON-CALL contracts. Abnormal fluctuations in ICE futures have made pricing transactions almost impossible, with demand from textile mills shifting to basis trading in the March contract, but frankly speaking, almost no country can ship to the port before the first quarter of next year.
Although the current yarn quotation is stable, the downstream market has become active, and Chinese and European yarn buyers have returned to the market. As mills consume raw cotton stocks, mill profits begin to improve, but profits will decline as they begin to use recently purchased high-priced cotton. The current strong demand for yarn is very important to maintain market confidence. </p
