Global Cotton Consumption Or Overestimated In 2016/17

According to statistics, as of the end of April, the total turnover of cotton reserves in 2017 was 1 million 198 thousand tons, and the turnover ratio dropped to 71.1%.

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According to the latest monthly report of ICAC, the global cotton growing area in 2017/18 is expected to grow by 5%. The growth rate of the three main cotton producing areas in China, India and the United States increased by 3%, 7%, and 12% respectively. Meanwhile, cotton growing areas in Pakistan, Australia, Brazil and Africa all showed growth.

The total output is also rising, and the gap between supply and demand has further narrowed. According to CCI statistics, as of the end of April, the new cotton market in India has reached 4 million 999 thousand and 700 tons in 2016/17, and the progress has already caught up with the same period in 2014/15 and 2015/2016. The domestic cotton price in India has finally lowered its arrogant head and realized quadruple Yin. The S-6 factory price has dropped to the lowest point since March 3rd. The exporters and India textile mills are watching the whole mood warming up. It is expected that there will be a large number of cotton and Pakistan cotton in India, which will be pushed to the international market.

The reporter judged that although cotton consumption in 2016/17 was in recovery stage, it was far less optimistic than that predicted by USDA and ICAC (24 million 514 thousand tons, 24 million 80 thousand tons). The reasons are as follows:

First, cotton consumption in India, Pakistan and some Southeast Asian countries is overestimated.

According to USDA's April report, the domestic consumption of India, Pakistan, Bangladesh and Turkey in the year 2016/17 was 5 million 171 thousand tons, 2 million 243 thousand tons, 1 million 415 thousand tons and 1 million 372 thousand tons respectively, and the growth momentum was obvious.

But what is worth noting is: first, because of the high and high international cotton prices in India, many spinning mills including India, Pakistan, Vietnam, Indonesia and many other spinning mills have changed to polyester, cotton, polyester, cotton and viscose blended yarn and pure polyester yarn and CVC.

According to statistics, the yarn production in 1-12 months of 2016 decreased by 0.05%, especially the output of pure cotton yarn, which decreased by 2.01% compared with the same period last year. The production of blended yarn increased by 5.74% compared with the same period last year. The output of non cotton yarn increased by 5.12% compared with the same period last year.

Affected by the high domestic cotton prices in India, the strong rupee exchange rate in India and the rising price of labor and energy, India cotton mill,

The situation is very difficult, not only textile and garment exports encounter bottles ", the recent yarn price FOB, CNF, CIF larger decline makes spinning mills difficult to resist, so production reduction, digestion of inventory has become the consensus of enterprises.

Two, the sales volume of China's reserve cotton in 2017 will be lower than that of some institutions and trade enterprises.

從統計來看，截止4月底，2017年儲備棉輪出成交總量為119.8萬噸(3月份63萬噸，4月份59.8萬噸)，4月份成交比例下降至71.1%;而隨著儲備棉輪出2011-2013年度新疆棉的占比逐月下滑、輪出截止至8月底及近期棉紗、坯布產銷難度加大，紡織企業隨用隨買，多看少拿的操作升溫;而貿易商由于2016/17年度新疆棉、儲備棉占壓大量資金，入市搶拍的節奏也將放緩，預計5-7月份儲備棉成交呈“降溫，休眠”階段，成交比例和成交價格大開大合希望不大，2017年儲備棉出庫總量很難打破300萬噸;另據中國棉花協會統計，截止3月底全國中轉庫棉花庫存約203萬噸，由此測算5月上旬棉花中轉庫存不低于170萬噸，而且由于2016/17年度地產棉公檢僅十幾萬噸，因此中轉庫存80%以上是新疆棉;而中國企業大量ON-CALL簽約進口2016/17年度美棉、澳棉、巴西棉等，與儲備棉、新疆棉產生強烈對沖。

Three, global monetary tightening policy has been applied to textiles in various countries.

The impact should not be underestimated.

Although the US GDP growth rate was only 0.7% in the first quarter, and consumer spending was also suppressed, although the Ministry of labour announced that in March, CPI fell by 0.3% compared with the previous month, the core price index fell 0.1%, which is the first decline in core price index since 2010, but the Fed's June interest rate increase is expected to become stronger. Some agencies believe that "the US Federal Reserve's next interest rate increase is in June and then increases again in September", while the US government's "shrinking schedule" is also unfolding. China, India and other developing countries are also taking a downward spiral.

In March of this year, the total assets of the Central Bank of China were 33 trillion and 740 billion yuan, 1 trillion and 90 billion yuan down from January, and the decline was 3.1%.

At the same time, due to increased supervision, commercial banks showed a trend of shrinking.

Whether China's cotton consumption can reach 7 million 893 thousand tons (USDA data) in 2016/17 is to be seen.

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