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

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

Vietnam and other Southeast Asian countries and Bangladesh have been blowout on imports of cotton, cotton and West African cotton, and India cotton has gradually become "chicken ribs".

It is understood that, as of October 6th, Vietnam, Indonesia and Pakistan respectively signed 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 to be very high, and no more cotton could be exported for export. For example, ICA, ICAC and USDA estimated cotton consumption by 5 million 253 thousand tons, 5 million 250 thousand tons, 5 million 225 thousand tons, basically the same.

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Cotton prices in India began to weaken as the supply of new cotton increased. Textile mills thought cotton prices would continue to be bearish and maintain a wait-and-see attitude recently.

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.

India cotton futures contract entered the oversold area in December, and the market may be technically revised 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 indicated that new cotton was listed in 2016/17.

All the way down, the price dropped from 89 cents / pound to 80 cents / pound, but the reduction rate of S-6 and J34 seed cotton purchase price was relatively small, so the cost of lint cotton linen was close to the price and even "upside down" phenomenon.

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.

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.

It is also inevitable that India cotton exports will be 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 will be 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 output of combed and combed yarn will increase greatly, and the demand and consumption of high quality and high grade "no three wire" machine cotton can be expanded. While the India cotton still stays in the state of hand picking and roller processing, it is difficult to comply with the requirements of spinning high count yarn, high density and high density grey cloth, and the problems of large impurity, short staple and poor consistency are also outstanding. 60%. Taking into account the strong expectations of the US Federal Reserve raising interest rate in December (some institutions even believe that the possibility of raising interest rates has reached over 60%), not only the pressure of devaluation has been great, but also the India rupees and the Vietnamese shield have greatly depreciated the US dollar.

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