Before and during the May Day holiday, there were many events affecting the cotton market, which will be fed back to the cotton futures and spot markets one by one when the market opens after the holiday.
1. The news of additional quota issuance came to light on the evening of April 30, and the quantity was less than the previous rumors
This time, cotton imports were issued The number of sliding tax quotas is 700,000 tons, all of which are non-state trade quotas. Among them, 400,000 tons are limited to imports through processing trade; 300,000 tons are not limited to trade methods. Enterprises that have obtained quotas can choose and determine the trade method when applying for a quota certificate. The additional issuance of quotas will increase the circulating volume of imported cotton on the market. However, before the news came to light, there were rumors in the market that the additional issuance of quotas would be around 2 million tons. This news once suppressed the market, and the actual additional issuance volume was lower than market expectations. It can be This is interpreted as having a positive impact on the market.
The additional issuance of quotas will ease the pressure on cotton inventory at the port. Longzhong Information testing data shows that the inventory of imported cotton at the port has remained at a level of around 600,000 tons or even above for more than a month. In addition, based on the previous boycott of Xinjiang cotton by Europe and the United States, the increase in the circulation of imported cotton will effectively solve some concerns about textile and apparel exports.
2. The temperature in Xinjiang recovered smoothly
Before the holiday, due to the sharp cooling and snowfall in northern Xinjiang, there was a certain panic in the market about production cuts. However, looking at the current situation, the temperature in Xinjiang has recovered smoothly, and replanting and reseeding in key disaster-stricken areas in northern Xinjiang have been completed. The actual impact on cotton output is predicted to be relatively limited.
3. The progress of U.S. cotton planting is relatively smooth, and Texas has received effective rainfall
The crop progress report released by the U.S. Department of Agriculture shows that as of last Sunday, U.S. cotton planting progress was 16%, higher than 12% a week ago and 17% in the same period last year. The average for the same period last year was 16%. Cotton planting progress in Texas is 19%, above the five-year average of 16%. The overall planting progress is good, but it is not enough to bring strong benefits to the market. On the 4th, rain fell in Texas, causing US cotton to plummet.
4. The epidemic in India continues to ferment, with short-term benefits but long-term concerns
On May 4, the Indian Ministry of Health released the latest statistics. In the past 24 hours, there were 357,229 new confirmed cases of COVID-19 in India, with a total of 2,028,833 confirmed cases. In the early stage, the textile industry focused on the issue of the return of orders from India. According to market feedback, a small number of orders did return, but in the long term, the concerns about the recovery of the global economy cannot be ignored.
In addition, there were various feedbacks on trade relations during the festival. Generally speaking, events that occurred during the festival had both long and short effects on the cotton market. In terms of demand, downstream yarn companies’ purchasing intentions and purchasing volume of raw materials in May will be better than those in April. In addition, yarn companies’ overall performance in terms of orders, prices, and profits is good.
It is expected that the cotton market will move out of a stable to strong trend after the holiday, and the overall cotton price focus in May may be higher than in April. </p
