Is Cotton Imports Declining More Or Less?

According to statistics of the General Administration of customs, China in February 2016

56 thousand and 200 tons, a decrease of 39 thousand and 400 tons, a decrease of 41.17%, a decrease of 102 thousand and 800 tons compared with that of the previous year, a decrease of 64.65%. In February of September 2015 -2016, China imported 517 thousand and 500 tons of cotton, a decrease of 364 thousand and 200 tons compared with that of the previous year, a decrease of 41.31%.

To gather information from all sides, there is no doubt that China's cotton imports will continue to shrink significantly in 2015/16. In 2016, 1 and February, the import quota of 1% cotton tariffs was in place, and a small amount of 2015 1% tariff quotas could be used.

The author believes that in February, there were not enough convincing factors in China's Spring Festival (cotton textile enterprises, traders and so on) for 10-15 days, but the USDA report showed that as of March 3, 2016, China signed a total of 106 thousand tons of 2015/16 cotton in the United States in March 3, 2016, accounting for only 6.51% of the US cotton export volume this year, but the total shipment of 68 thousand tons, accounting for 64.77% of the contracted volume in China. Compared with the import data of the Customs General Administration, the statistics of USDA are more shocking.

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And domestic consumption is far larger than expected by all parties?

The decline in the production of high count yarn results in a decline in demand for high grade and high quality cotton by cotton producers.

2015/16 cotton yarn with 40S or above

The ratio is very low (at the same time to meet the length 28mm and above, the horse value is at least 5 below or even B/A, the fracture intensity 28CN and above). In southern Akesu, Kashi, Korla and other places, many cotton enterprises enter the warehouse for public inspection to reach the requirement of high spun yarn, the lint only accounts for 10-20% of the total processing volume.

Since February, a number of mainland cotton textile enterprises in and outside warehouses have been buying 2128B, 2129B and 3129B Xinjiang cotton all over the world.

India, Vietnam, Pakistan and Central Asia and other places 40S and above combed yarn and combed yarn have little impact on the domestic demand and export of China's cotton textile enterprises for a short time.

On the one hand, the cost of producing high count yarns in India and other cotton mills is high, the price after customs clearance is even higher than that of domestic yarn; on the other hand, the high count yarn is mainly reserved, not consignment, low single supply and poor stability of cotton yarn, so although China imported 2 million 345 thousand tons of yarn in 2015, the cotton yarn of 40S or less was less than 10%.

Chinese enterprises are expected to purchase high-grade cotton in large quantities just because the cotton reserves are about to come out and postpone.

How many cotton resources can be spun out in the upcoming cotton reserve to spin high count yarn and weave high density and high density grey cloth? The length of cotton fiber stored and stored in 2012-2013 years is not big. However, the high horse value, the decline of grade and the large content of "three silk" will affect the enthusiasm of cotton textile enterprises and traders.

USDA predicts that the US cotton planting area will grow by about 9 million 400 thousand acres in 2016/17, up by 9.6% over the same period last year. In contrast, the cotton planting area in China and the whole world (except the main cotton producing countries outside the United States) has been greatly reduced. This scenario is similar to that of soybean, rubber, crude oil and iron ore market.

On the one hand, cotton textile enterprises are struggling to find high quality cotton; one side is nearly about 10000000 tons of cotton reserves; on the other hand, the government strongly advocates that farmers adjust their industrial structure and reduce cotton planting. After the "three level jump" of cotton growing area in Xinjiang, the Yellow River and Yangtze River Basin cotton area, if cotton import quota is released again, cotton textile enterprises have guaranteed cotton resources, but who has the final say in the price?