Cotton Consumption In China Was Basically Unchanged From 2015/16 In The Same Period Last Year.

China's cotton consumption will increase by tens of thousands of tons and more than ten million tons, and will not change the supply and demand situation of China and the whole world in the new year. Besides, China's economic growth has slowed down sharply this year and the international oil price has continued to slump, so it is still a long way to go to improve cotton consumption.

However, under the positive influence of China's monetary policy, the textile industry is expected to usher in new opportunities for development.

From the perspective of the state, it is the main policy keynote for a long time to concentrate on the digestion of reserves and reduce the issuance of quotas.

If the quality of domestic cotton can keep up with the new year and even the next few years, domestic cotton consumption and domestic cotton demand are still very promising.

So far, domestic and foreign agencies are cautious about China's cotton consumption. The latest projections of the US Department of agriculture, the International Cotton Advisory Committee and the national cotton market monitoring system show that China's cotton consumption in 2015/16 is basically the same as that of the previous year.

However, a recent report by the US agricultural counsellor sings a different tune.

According to their forecasts, China's cotton consumption in the new year is expected to increase by 500 thousand packs (about 110 thousand tons) to 7 million 510 thousand tons, the first increase in six years, because the fall in the RMB exchange rate will promote China's cotton consumption.

Although this is not the official forecast of the US Department of agriculture, it has aroused heated debate among foreign analysts and agencies.

A few days ago, an international cotton trader was talking with the author.

It has many advantages for Chinese textile enterprises.

First of all, the cost of Chinese cotton will drop.

Compared with 2-3 years ago, China's domestic cotton prices have dropped by more than 40%.

He believes that with the continued depreciation of the renminbi, the price advantage of domestic cotton will further expand.

It is even foreseeable that China's cotton will be the cheapest in the world in the next 3-6 months.

Secondly, the depreciation of the renminbi has further narrowed the gap between the internal and external yarns.

As of the beginning of September, the price of India's 32 yarn was about 20300 yuan, and 32 domestic yarn.

About 20500 yuan, there is almost no difference between the two.

Without price spreads, domestic enterprises will no longer be eager for imported yarns.

Textile mills are more willing to use domestic yarn, which will stimulate the use of domestic cotton.

Third, along with

With the reduction of cost and the expansion of domestic yarn demand, the competitiveness of domestic yarn will obviously increase, and the trend of textile production capacity will gradually cool down.

The cotton trader believes that there is no reason for Chinese textile enterprises to move their production capacity.

In this sense, the depreciation of RMB will help Chinese textile enterprises.

With the decline of cotton prices and exchange rate changes, China's textile enterprises will have a rare opportunity to produce and operate.

Customs data show that in the first half of 2015, China's exports of cotton textiles and garments were 40 billion 850 million dollars and 5 billion 400 million US dollars, with an average monthly value of 6 billion 810 million US dollars and 900 million US dollars respectively. According to the depreciation of the RMB 1.86%, the net export increased by 110 million US dollars in the latter part of the theoretical calculation.

On the 12-13 day of August, when the Chinese government intervened for two consecutive days, the exchange rate of RMB against the US dollar has fallen by 5% over the past month.

The depreciation of the renminbi at this time did allow the market to expect exports of textiles and clothing.