What Is The Change In China'S Quotation Of Australian Cotton?

Since the new year's day, the sale of Australia cotton to China has been more active than before. In addition to the port consignment cotton, China has also purchased a considerable number of origin cotton and arrived at the port before the lunar new year in February.

According to the Australian authoritative research institutions, China adjusted the sliding tax formula to make the expensive Australian cotton more popular than before, plus the sharp decline in ICE futures and the sharp reduction in the price of Australia cotton, which greatly stimulated China's desire to buy.

According to market information, from Christmas to early January, Australia's SM 1-5/32 G5's spot price quote was 1650-1700 points (March contract), the premium 1-7/32 premium was 50 basis points, and the 1-1/4 premium was 100 points.

Before Christmas, the CFR price of Australia cotton to China was 90 cents / pound, and the slide price adjustment only enlarged the quoted price basis by about 1.6 cents.

With the acceleration of the export of Australian cotton, the cotton stocks of cotton traders began to decrease in 2018, and the base period of the 5-6 months in 2019 is close to 1900, compared with 1750 before Christmas.

In addition, due to the reduction of cotton production in India, the market expects that India's cotton imports will increase after 6-7 months, which is of great significance to the international market. However, Australia cotton accounts for only 8% of India cotton imports, while Australia cotton's share in the mature market is 15-20%.

However, in recent years, the share of India's cotton imports has gradually increased, especially in 2016 when India cotton was substantially reduced.

The excessive export of S-6 in India at that time increased India's demand for high-grade cotton.

The supply of high-grade cotton is tight this year, and the market in the middle of next year needs special attention.