Cotton Market: Global And China Supply And Demand Balance

In 2014/15, the supply and demand of global supply and demand exceed the demand, and the output is larger than the demand of 1 million 800 thousand tons, accounting for 7.45% of the annual consumption. This is the fifth consecutive year of continuous global stock raising in the fifth consecutive years. So what is the inventory consumption situation in China and other countries?

Global Inventory consumption Compared with the 6 consecutive years since 2009/10, China's inventory consumption ratio almost repeats the same situation. Even with the exception of Chinese factors, the external consumption market outside China (hereinafter referred to as the "external market") is in a high level in the past 10 years in 2014/15, and has increased substantially over the past 10 years, so 2014/15 year fringe market The situation of supply and demand is also grim.

China's cotton imports accounted for more than half of the world's cotton trade in 2011/12 (54.13%). Since then, the share of China's imports in Global trade has dropped by about 10% a year. Chinese demand Weakening pressure on cotton prices in the peripheral market. How big is this pressure? Let's take a look at the five major sources of cotton imports in China: the United States, Australia, Uzbekistan, China.

More than 70% of China's cotton is imported from the five major cotton exporters. Taking 2013/14 as an example, China's imports account for a large proportion of the five largest cotton exporters. In the year of 2014/15, the export expectations of the five major cotton producing countries did not decrease much. Australia's cotton imports decreased to 1 million 590 thousand tons from 3 million 70 thousand tons in 2013/14, because of the strict 1% tariff quota control, the actual import could be far lower than the 1 million 590 thousand tons import expectation. Therefore, from the perspective of Chinese factors, the probability of a big rise in the external market in 2014/15 is low.

Look at the global situation, and talk about China. China's final inventory has been rising since 2011/12, and 2014/15's domestic inventory consumption is 185.6%.

So the question is, is China's extremely high inventory consumption ratio because of the national storage of cotton? If we do not consider the national reserve stock, is the domestic supply and demand really strained in 2014/15? According to the statistics of USDA 2015 February, the annual output of China's 6 million 530 thousand tons of 2014/15 and the import of 1 million 590 thousand tons will be increased by 653+159=812 tons per year. The annual demand and supply gap of China is 7 million 730 thousand tons, and the annual supply and demand gap is 812-773=39 million tons, that is, the domestic surplus reserve is still 390 thousand tons in 2014.