According to feedback from cotton trading companies in Qingdao, Zhangjiagang, Guangzhou and other places, since late May, not only has the pressure on customs clearance of foreign cotton at major ports in China been relatively high, there have been certain delays, but there have also been long queues for bonded cotton warehousing. Some warehouses with good locations, reasonable storage fees, and convenient entry and exit are even overcrowded with cotton, and some cotton import companies and traders have to pay high late fees.
As for the reasons for the resistance to cotton warehousing and customs clearance at ports, the industry generally analyzes the following three points:
First, the import pressure of the new crown epidemic has increased, and various ports have increased their prevention and control measures. The control level, sampling, testing, detoxification and other measures are strictly implemented; in addition, each warehouse is also fully committed to epidemic prevention, thus affecting the progress of cotton entering and leaving the warehouse;
Second, due to the arrival of goods in March/April/May The quantity of foreign cotton imported into ports and warehouses is still at a high level. However, due to the severe shortage of the 1% tariff cotton import quota and the sharp plunge in Zheng cotton futures, which has led to a significant narrowing of the price difference between domestic and foreign cotton, the bonded cotton stocks at ports continue to explode, and cotton customs clearance and entry Treasury has passively slowed down;
The third is the recent sharp appreciation of the RMB, and the central bank has taken a heavy blow. Starting from June 15, 2021, the foreign exchange deposit reserve ratio has been raised from 5% to 7%. Some foreign businesses and cotton importing companies Worried that the U.S. dollar has stopped falling sharply against the yuan and rebounded, there are more operations to rush to close the market before June 15.
Judging from the quotations of some foreign merchants and imported cotton companies, not only the basis difference of cargo/bonded cotton such as U.S. cotton, Brazilian cotton, and West African cotton remained stable this week, but the basis difference of foreign cotton cleared at the port was also relatively stable. , although the main ICE cotton futures contract continues to consolidate at 82-85 cents/pound, and cotton in major ports is “significantly greater than outbound”, cotton trading companies are still not willing to take the initiative to lower the basis and reduce prices to sell goods. , the mentality of waiting for the price still prevails.
Cotton spinning mills in Shandong, Jiangsu and other places said that since May, not only the US dollar quotations of Brazilian cotton and Indian cotton at the ports have been quite different, but the RMB prices are also a bit chaotic. When purchasing cotton, companies must not only shop around, but even Shop around five or seven stores. The price difference between the spot quotation of M 1-5/32 Brazilian cotton of the same quality and grade even reaches 300-400 yuan/ton. Textile companies believe that it may be caused by the following reasons: First, so far, a small number of cotton trading companies have relatively low inventories of Brazilian cotton, US cotton, and Indian cotton (generally only 20-100 tons left), and they are eager to cash out shipments; second, 2020 / ICE futures fluctuated widely in 2021 (the main contract rose from 61.65 cents/pound to 96.22 cents/pound and then fell back to 78.15 cents/pound), and the cotton costs of various companies vary greatly; thirdly, the RMB from March to May The sharp appreciation has led to a large discrepancy in the actual cost of cotton with different customs clearance cotton. Fourth, after the Spring Festival, a certain amount of low-horse value US cotton and Brazilian cotton have been waiting for port, storage or customs clearance (the fiber length is generally 1-1/8 and above, Strong 28GPT and above), the quoted price is significantly lower than that of medium and high-quality foreign cotton, which will have a certain impact on the spot market. </p
