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    Global Demand For Cotton Is Weakening.

    2016/1/9 14:36:00 42

    Global MarketCottonDemand

    China in 2015/16 Quota The sharp reduction in cotton prices and the drop in domestic cotton prices have led to a sharp reduction in China's cotton imports and the suppression of international cotton prices. At the same time, other countries in Southeast Asia, such as Vietnam, Indonesia and Pakistan, have increased their imports of cotton. Mexico and Vietnam increased their purchases of US cotton, while Pakistan suffered heavy losses due to floods in some cotton areas and increased procurement of India cotton.

    Global production dropped sharply in 2015/16. consumption Stock prices have increased. The world's major cotton production has declined, with China, Pakistan and the United States reducing production considerably. Consumption in China and Pakistan has declined in global consumption, while consumption in Vietnam, Bangladesh and India has increased significantly. Global Inventory Stocks in China and India declined significantly.

    The US Department of agriculture's December report showed that global cotton production fell to 22 million 580 thousand tons in 2015/16. Compared with 2014/15, global production decreased by 3 million 354 thousand tons, or 13%. The global cotton production volume was adjusted to 24 million 252 thousand tons, compared with 2014/15, the global output increased by 200 thousand tons. Global inventory dropped to 22 million 729 thousand tons, compared with 2014/15, global production decreased by 1 million 659 thousand tons, a decrease of 6.8%.

    It is expected that cotton prices will gradually shrink in 2016 as cotton prices fall. Under the control of import quota, the amount of cotton imported by China as the largest consumer of cotton will not differ from that of 2015. Therefore, in 2016/17, the pressure of global cotton sales is still decreasing, and the international cotton price is also hard to rise.

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    As China's traditional export products, textiles and clothing accumulated 257 billion 26 million US dollars in the first 11 months, down 5.79% compared with the same period last year. Among them, the total export of textiles was 99 billion 760 million US dollars, down 2.6% compared with the same period last year, and the total export volume of clothing was 157 billion 267 million US dollars, down 7.71% compared with the same period last year.

    The export situation is not good, the order volume falls, on the one hand is affected by the global economy weak, the demand is weak, especially the European Union and Japan's economic slump, which accounts for nearly 30% of China's textile and garment industry's export share, China's orders have been greatly reduced; on the other hand, there are also reasons for the international transfer of orders. Due to the weakening of the price advantage of China's labor-intensive industries, some overseas orders are transferred to emerging economies such as Vietnam, India, Indonesia and Kampuchea with lower labor costs, especially in the clothing industry. The adoption of the trans Pacific (601099, stock bar) partnership agreement (TPP) will also have a great impact on China's textile and apparel industry.

    In 2015, imported cotton yarn continued to impact on the Chinese market. Although cotton prices in China have dropped sharply in recent years and the difference in cotton prices between domestic and foreign countries has been narrowing, India, Pakistan and Vietnam still sell large quantities of cotton yarn to China through reducing profit margins. In the first 11 months, China's total imports of cotton yarn nearly 2 million 160 thousand tons, an increase of 19.7% over the same period, and the total import volume is expected to be over 2 million 300 thousand tons.

    Imported cotton yarn has been squeezing Chinese cotton textile market in recent years due to its low raw material cost advantages and processing cost advantages, especially Vietnam. In recent two years, a large number of large textile factories in China have invested and built cotton yarn in Vietnam, and then sold cotton yarn through its mature sales channels in China, so China's imports of Vietnamese cotton yarn have increased significantly.


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