Can 2016/17 Cotton Exports Be "Counterattacked" In India?

It is understood that

Since early October,

For 2015/16, Chen cotton's enquiry and procurement continued to cool down. Attention shifted to new cotton in 2016/17, but the difference between S-6 Chen cotton and new cotton was nearly 10 cents / pound, making many textile mills pessimistic.

It is reported that the 2015/16 textile mill in India imported 377 thousand and 400 tons of cotton, mainly Australian cotton, American cotton and West African cotton.

The latest projections of the US Department of agriculture show that India's cotton imports and final stocks have increased by 110 thousand tons in 2016/17, the import volume has reached 326 thousand tons, the annulus ratio has increased by 50%, and the domestic cotton production, output and export volume have not changed. The total supply is 8 million 478 thousand tons, the total demand is 6 million 75 thousand tons, and the final inventory is 2 million 404 thousand tons.

As of October 13th,

Futures contracts entered the oversold region in December, and technical correction may take place in the near future. The underlying price is 18700-18750 and 17600-17650.

It is understood that with the October 13th southwest monsoon withdrawal from Gujarat and central Pradesh, most cotton areas in India are in clear and hot weather, which is conducive to cotton growth, bolting and picking.

At present, the factory price of S-6 and J34 ginning plants in 2016/17 is maintained at 79.60 cents / pound, 72.90 cents / pound.

Some ginning plants said that the price of new cotton fell down from 89 cents per pound to 80 cents / pound in 2016/17, but S-6, J34

The reduction rate is relatively small, so the cost of lint in the ginning mill is close to the price and even "upside down" phenomenon, which is "the same with the Xinjiang cotton processing enterprise".

Since the beginning of October, the India cotton mill has continued to cool down the inquiry and purchase of Chen cotton to 2015/16, turning its attention to the new cotton of 2016/17. However, the difference between S-6 Chen cotton and the new cotton price is nearly 10 cents / pound. Many cotton ginning mills and cotton mills are pessimistic about cotton price and yarn price.

The India Cotton Association forecast in August that India lint yield of 33 million 600 thousand packs (about 5 million 712 thousand tons) in 2016/17 was smaller than that in 2015/16, and the supply of cotton in the new year is larger than the consumption of about 1 million 513 thousand tons.

USDA forecasts that the export volume of India cotton in the 2016/17 year is about 849 thousand tons, which is significantly lower than the 1 million 255 thousand tons in 2015/16, a decrease of 47.82%.

Industry analysis, on the one hand, Pakistan, Vietnam and other Southeast Asian countries and Bangladesh to the United States cotton, Australia cotton, West Africa cotton imports such as "blowout", India cotton gradually reduced to "chicken ribs".

It is understood that, as of October 6th, Vietnam, Indonesia and Pakistan signed respectively 189 thousand tons, 122 thousand tons and 98 thousand tons of 2016/17 cotton in the year of October 6th, while the contracted volume last year was only 75 thousand tons, 55 thousand tons, and 2 thousand tons. On the other hand, including USDA, the agencies expected the cotton consumption in India in 2016/17 year to be very high, and no more cotton could be used for export. For example, ICA, ICAC and USDA estimated cotton consumption in India were 5 million 253 thousand tons, 5 million 250 thousand tons, 5 million 225 thousand tons, basically the same. But from 8, September, India cotton yarn exports plunged sharply and Tamil Nadu, Ma jarat, and a large proportion of cotton mill production and production stopped, India cotton consumption in the year of 2016/17 was not very optimistic.

Can 2016/17 cotton exports be "counterattacked" in India? First of all, India cotton is hard to get back to good quality and low price.

Since mid October, although the main contract of ICE has risen from 66.76 cents / pound to 70.74 cents / pound, it has risen by nearly 4 cents / pound. The CNF quote of the Far Eastern CNF for shipping date C/ASM and EMOTSM is 81.70 cents / pound and 80.70 cents / pound in 11/12 month, but the October India S-6 new flower mill has already reached 79-80 cents per pound. The market will be higher than 81 cents / pound in China, Vietnam and Indonesia, and how to compete with American cotton. Secondly, the trend of India rupee depreciation against the US dollar will not change.

Taking into account the strong expectations of the Federal Reserve raising interest rates in December (some institutions even believe that the possibility of raising interest rates has reached more than 60%), not only the pressure of RMB depreciation is great, but also the large depreciation of the dollar against India rupees and Vietnam shields is unavoidable, and India cotton exports are calculated in terms of "US dollar". Once the depreciation of other countries' currencies against the US dollar is greater than the depreciation rate of India rupees against the US dollar, it is easy to imagine the difficulty of importing cotton. Once again, including the upgrading of equipment and equipment in Southeast Asian countries, South America and Bangladesh and Vietnam, the production of C32S and above combs and combed yarns has become a necessity for high quality and high grade.

The demand and consumption of machine picked cotton are enlarged, while India cotton still stays in the state of hand picking and roller processing. It is difficult to meet the requirements of spinning high count yarn, high density and high density grey cloth, and the problems of large impurities, short staple and poor consistency are also prominent.

Therefore, it is not likely to predict India cotton export counterattack.