China Cotton Market December Monthly Report: Downstream Demand Is Still Not Optimistic.

This month, cotton imports and consumption were slightly reduced in 2016, import volume dropped to 985 thousand tons, and consumption dropped by 7 million 453 thousand tons.

The forecast of domestic production and storage in 2017 is estimated that cotton production will be 5 million 37 thousand tons in the year, and the reserve cotton will continue to play a role in making up the gap between production and demand. The import and consumption will be slightly reduced. It is estimated that cotton imports will be 913 thousand tons, consumption will be 7 million 395 thousand tons, and ending inventory will be 6 million 692 thousand tons, down 20.8% from the same period last year.

It was 20.1 percentage points lower than 90.5%.

(1) the tight domestic supply pattern has eased foreign cotton supply.

1, the global cotton production and demand gap continues to expand.

The US Department of agriculture's global cotton production and demand forecast in December showed that the global cotton output of 2269.5 and the global cotton production increased by 580 thousand tons in 2016/17. The main reason is that cotton production forecasts in major countries such as India, the United States and Australia continue to adjust.

At the same time, the Global Forecast of cotton consumption is on the basis of continuous reduction.

In 2016/17, 18 million 123 thousand tons of cotton output and 16 million 583 thousand tons of consumption were produced outside China, with 1 million 540 thousand tons of production and demand (output and consumption), an increase of 281 thousand tons from the previous month.

2, the current domestic supply situation has improved.

By the middle of December, foreign cotton came to Hong Kong in succession, and the cotton stocks in the main port free trade zones reached 5.5-6 million tons. Since December, with the reduction of pportation business in the territory and the completion of the upgrading and upgrading of the comprehensive commercial special line in Korla West Railway Station, the pportation situation of Xinjiang cotton highway and railway has been fully changed, and the freight rate has been reduced.

Futures will fall, and spot resources in the base trading mode will pour into the market.

3, the cotton production situation is relatively optimistic in the new year.

The cotton cotton market monitoring system released by China's cotton planting area survey showed that in 2017, China's cotton planting area was 44 million 805 thousand mu, an increase of 960 thousand mu, an increase of 2.2% over the previous year. Cotton production is estimated to be 5 million 37 thousand tons, an increase of 160 thousand tons compared with the same period last year, an increase of 3.3%.

(two) downstream demand is still not optimistic.

1, the declining trend of textile and clothing exports is hard to change.

According to China Customs statistics, in November 2016, China's textile and clothing exports amounted to US $21 billion 623 million, an increase of 0.76%, but the general trend of overall decline has not changed.

In 2016 1-11, the total export volume of textiles and clothing in China was 239 billion 557 million US dollars, down 6.73% from the same period last year.

After Trump took office in January 2017, the chances of Sino US trade friction increased.

Trump recently announced the formation of the White House National Trade Commission and appointed Navarro as chairman of the Committee.

Navarro is famous for his strong support for Huaqiang.

A 45% tariff on goods from China is also supported to label China as a currency manipulator.

2, the cotton price difference between inside and outside is too large to restrain domestic cotton demand.

Since December, domestic and foreign cotton prices have declined, and the difference between domestic and foreign cotton prices is still large.

In December 29th, the international cotton index was 78.24 cents / pound, and the cost of import was 13903 yuan / ton, which was 1839 yuan / ton lower than the national cotton B index, and the price difference ratio expanded by 79 yuan / ton. Compared with the export price of 1-2 cotton in 2017, the price difference is still large.

Moreover, cotton prices in India, Pakistan, Vietnam and other major countries are likely to slide and pour into the Chinese market, further inhibiting domestic cotton demand.

3, textile enterprises raw material procurement intention is not strong.

In view of the continuous decline in cotton prices at home and abroad, the difference between domestic and foreign cotton prices is still relatively large. The Spring Festival holiday and the cotton storage wheel are approaching, and the purchasing intention of textile enterprises will weaken and wait-and-see psychology will aggravate.

The results of China's cotton industry inventory survey released by the national cotton market monitoring system showed that in early December 2016, textile enterprises accounted for 63% of the raw materials purchased, 7 percentage points lower than the ring, and 36% of the wait-and-see enterprises, 10 percentage points higher than the annulus.

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