High Grade Cotton Spot Scarce Basis Rises Again Rises

In the context of the Sino US trade war and the slowing down of China's economic growth, the number of high-grade cotton available for export in 2018/19 is becoming a problem.

Excessive rainfall in the cotton producing areas of the United States and unfavorable rainfall in other exporting countries, coupled with the drought in Australia, has a very limited volume of high and medium grade cotton with desirable fiber length and low fiber content in the world. The low grade and color level become the main force of spot supply, and the textile mills need to pay a very high base to get the ideal spot.

First, Australia cotton was basically sold out in 2018, and Australia cotton was close to oversold in 2019.

The cotton price of American cotton 31-3 has been very low. Brazil's demand for cotton in 2018 is strong, and its base is also rising. Some Cotton Traders' inventories have been significantly reduced. In March, the base level of cotton with grade 1-1/8 or above has risen to more than 1000 points, and the base of some SM 1-5/32 has reached 1050-1200 points.

At present, Brazil cotton has been bought by China in 2018, and the quality of American cotton is decreasing in the later stage of the year. The grade and color grade excellent cotton has been oversold, and the main color level is 41 or SLM.

According to market forecasters, the US EMOT 41-5-37 has sold 80-90 million packages or even more since the US Department of agriculture stopped the US cotton export weekly.

Except for American cotton and Australian cotton, the main grade of cotton in Greece and Turkey is SLM grade. The reduction of cotton production in India has reduced the supply of its exports, especially the supply of S-6, forcing the textile mills to find other high grade varieties.

At present, the West African cotton SM 1-1/8 is very popular with the India Pakistan textile mill. In the past two years, cotton production in West Africa has increased significantly, and the supply of exports has increased significantly. The supply of 1-1/8 grade cotton is very abundant, and the basis is also quite strong, which is higher than that of many other machine picked cotton.

Many Cotton Traders quote West African cotton as SM 1-1/8. The base of Malian cotton is 1200-1300 points, Benin cotton is 1100-1200 points, Cameroon and Burkina Faso's high base difference reaches 1350-1400 points and 1250 points respectively, the cheapest Ivory Coast cotton base difference also has 1100-1150 points, and Togo's base is above 1000 o'clock.