According to statistics from some international cotton merchants and large and medium-sized cotton importing enterprises, the total cotton inventory in Qingdao, Zhangjiagang, Shanghai and other major ports in China has continued to rise slightly (bonded cotton + non-bonded cotton) since mid- to late May, but the The phenomenon of “the growth of bonded cotton warehousing is greater than that of customs cotton entering and bonded cotton leaving warehousing”. Among them, the arrival and warehousing volume of Indian cotton in April/May 2020/21 and 2019/20 increased significantly. US cotton, Brazilian cotton, The arrival volume of West African cotton and other products has remained relatively stable.
Some cotton-related companies estimate that as of the end of May, the total cotton inventory at China’s ports may have reached 570,000-580,000 tons (about 500,000-520,000 tons by the end of April), of which Huangdao And the bonded + non-bonded cotton inventory in the Jiaozhou Bay area is about 330,000-350,000 tons, accounting for more than 57% of the total foreign cotton inventory in the country’s ports. US cotton, Brazilian cotton, and Indian cotton are still firmly in the top three, but since May, the gap between the number of bonded + non-bonded Indian cotton and Brazilian cotton and US cotton has continued to narrow compared with March/April.
The main reasons for the increasing foreign cotton stocks in China’s main ports and the “explosion” of warehouses are as follows:
1 March to June is traditionally the concentrated shipment period for exports of U.S. cotton, Brazilian cotton, Indian cotton, Australian cotton, etc. However, due to various factors such as the difficulty of the COVID-19 epidemic in 2020/21, skyrocketing sea freight and difficulty in finding shipping space, some The shipment and shipping dates of US cotton, Brazilian cotton, etc. have been postponed to the second and third quarters of 2021;
Second, since mid-March, India, Pakistan, Bangladesh, The epidemic broke out again in Indonesia and other Southeast Asian countries and got out of control. Some ports suspended operations or closed. Exporters and international cotton merchants have transferred to countries such as China and Vietnam that have better epidemic control. As a result, China’s port arrivals and warehousing volumes have significantly exceeded Expected;
Third, the 1% tariff cotton import quota is seriously insufficient, the 700,000 tons sliding quasi-tariff import quota is uncertain, and there are many factors such as the global epidemic and the sharp fluctuations in the RMB exchange rate. Cotton textile companies are cautious about “overdrafting” the sliding tax quota in advance. Therefore, recent customs clearance cotton point price transactions have been relatively active, while bonded and cargo transactions have been relatively deserted. With the main ICE contract breaking 82 cents/pound and 80 cents/pound, / pound, textile companies and traders are likely to miss the opportunity to enter the market;
Fourthly, although ICE’s main contract has broken through 88 cents/pound, 85 cents/pound, and 82 cents in a row; / pound, but most international cotton merchants and trading companies’ foreign cotton basis has remained stable or even increased, and the futures and cash prices have fallen out of sync, triggering buyers to wait and see and wait for the mood to heat up. </p
