Can Domestic Cotton Market Improve In 2016?

Since January 2016, the downstream market situation of the domestic cotton textile industry chain is not good enough. Not only the orders for textile enterprises have been decreasing, but also affected by the factors of the Spring Festival holiday, the raw material procurement work basically stagnated.

At this time, upstream

Processing enterprises are deeply trapped in sales difficulties, and selling cotton is a common problem in the industry, especially in 2016.

Cotton companies are on pins and needles as expected.

Can domestic cotton market improve in 2016?

As can be seen from the graph, 2011-2015

Continuation of the downward trend, it is estimated that the 2016 cotton prices will continue to rise and fall is less likely.

Judging from the global supply and demand, according to the latest report of the International Cotton Advisory Committee (ICAC), the world cotton output in 2015 is estimated to be 22 million 890 thousand tons and consumption is 24 million 330 thousand tons, which is in a tight balance as a whole.

From domestic supply and demand data, domestic cotton end inventory will reach 13 million 50 thousand tons in 2015, and supply and demand will be seriously unbalanced.

Because domestic cotton import tariff quotas remain at 894 thousand tons in 2016, domestic cotton market is unlikely to be affected by foreign markets.

In addition, domestic downstream demand is shrinking.

As China's largest textile exporter in the world, its export situation is also not optimistic. In 2015, the export volume of textile and clothing decreased year by year, which had to make people worry about its export situation in 2016.

As shown below, in 2014, the export volume of textiles and clothing reached a historical peak in China, and began to decline in 2015.

Affected by lower demand and weaker exports, domestic cotton imports in 2015 were almost cut.

According to China Customs data, 1 million 473 thousand tons of cotton were imported in 2015, a decrease of 970 thousand tons compared with that of the previous year, with a reduction of 39.8%, of which textile exports and clothing exports both declined.

In addition, cotton production in Vietnam, Bangladesh and Indonesia has been increasing in recent years, and has stimulated cotton imports. In 2015, Bangladesh is likely to overtake China as the largest cotton importer for the first time, while Vietnam will be the third largest cotton importer.

Cotton imports in India and Pakistan will also increase in 2015, which will undoubtedly cause great pressure on the domestic textile industry.

On the other hand, the domestic cotton market is facing great challenges in 2016. It is difficult to improve domestic cotton sales and low prices.