In Southeast Asia, The Cost Advantages Of Cotton, Spinning, Weaving, Clothing And So On Have All Declined.

From the quotation of some foreign businessmen and large import enterprises, since the end of June, the main contract of ICE has continued to oscillate in the 66-69 cents / pound box (low 66.15 cents, a new low since September 2016), and the spot quotation of the US cotton (including 2016/17, 2017/18 new flower), Australia cotton, West African cotton new flower, Uzbekistan and so on has been more and more volatile. However, India cotton S-6 has not plunged with the ICE and outer disk's deep adjustment, and the ginning factory and exporters have been very calm.

According to the statistics of the Ministry of agriculture of India, as of June 29th, the cotton planting area has reached 71 million 865 thousand mu, an increase of 56.5% over the previous year, and the increase is far higher than the expectations of all parties. As of June, the 30 Japanese new cotton listing in India reached 5 million 554 thousand tons, up from 5 million 454 thousand tons in the same period last year. However, the factory price of India cotton ginning factory and the quotations from the Far East port are still at a high level, which is contrary to the trend of international cotton prices.

From the survey point of view, since the middle of June, the port has high quality Australian cotton.

Wu and cotton saw goods, inquiries and signed shipments were much more active than before. Bonded and spot contracts grew. However, India cotton, such as S-6, J34, MCU5 and so on, were slow to respond to shipments. The reason why cotton prices in India were so high that sellers would rather be indifferent.

First, India cotton has almost no profit margins and price cuts from the ginning plants to the exporters.

Affected by MSP in 2016/17, new monetary policy, GST and so on.

The purchase price of seed cotton has risen all the way, and the cost of lint cotton has gone up high; and the India rupee's strong exchange rate with the US dollar has given India cotton price more pay and firewood, and the trading enterprises and exporters have almost no room for mitigation and bargaining.

Second, the number of foreign traders and traders who operate India cotton has been greatly reduced.

From the survey point of view, since 2013, the number of international cotton traders who operate and operate India cotton has been decreasing. The direct export of India cotton ginning enterprises has gradually disappeared. There are both reasons for the decline of export volume in India due to the large increase in cotton consumption demand. Even when cotton prices have risen sharply, India cotton growers, cotton processing enterprises and exporters often raise their prices unilaterally, postpone shipment, break contracts or cancel large scale supply contracts and so on, resulting in heavy losses to international cotton traders and buyers.

Thirdly, India enterprises have their own

Consumption capacity is estimated to be high.

According to USDA's latest monthly report, India's domestic cotton consumption in the 2017/18 year is about 5 million 389 thousand tons, an increase of 218 thousand tons compared with that in 2016/17, while the statistics of India related departments are more optimistic.

Fourthly, the cost of cotton planting, labor wages and other taxes and financial costs in India increased significantly.

From the survey point of view, in recent years, the wages of workers, the prices of agricultural materials, the investment in cotton planting and the cost of financing have risen continuously in India. The cost advantages of cotton, spinning, weaving and clothing in Southeast Asian countries have all declined, as in China after 2010, which is in the bottleneck of pformation.

At present, the fundamentals of the cotton market are still empty. However, given the gap between production and marketing and the continuous reduction of domestic cotton stocks, the cotton price will be reduced in the future.

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