Foreign Cotton Pactions Are Very Active, "Grab Off" Is Just The Fuse?

From the feedback of port trade in Qingdao, Zhangjiagang, Guangzhou and Shanghai, since the end of 2, the turnover and export volume of bonded and spot cotton have increased significantly compared with December and January. It has become a beautiful scenery in the imported agricultural products market. Not only the quality of high quality and high spinnable cotton in Australia cotton, Brazil cotton, American cotton, Ukrainian cotton and so on, but also the price and price of India cotton, which are not cheap but not cheap, are much more active than that of half a month ago.

Under the premise that the domestic cotton market is now rebounding hard and the spring is cold, the port bonded cotton and the sailing cotton are the first to welcome the "willow breeze to the wind".

Several foreign businessmen and importers said recently, the outcrops of cotton, cotton and Brazil cotton were very busy. Every day they had to receive a few customers who saw goods, inquired and signed contracts. Some old customers even bought orders directly according to the commodity inspection report and the seller's quotation.

It is understood that, on 27-28 February, foreign traders and traders EMOT/MOT SM 1-5/32 quoted price as a whole fell below 80 cents / pound (concentrating on 79-79.5 cents / pounds, CIF), while SM 1-5/32 Brazil cotton, SM West Africa cotton, S-6 1-5/32 were quoted at about 83 cents / pound, and cotton textile mills and middlemen received a higher degree of acceptance.

Why is cotton trading so active?

The industry generally believes that it can be summarized as follows:

The first is the issuance of the sliding tariff quotas in 2018, and the effective expiration date of the 1% tariff quotas in 2018 are all at the end of February.

Two is the ICE futures contract again fell sharply, approaching 70 cents / pound gate trigger a certain amount of "ON-CALL" point price paction.

The three is the strong appreciation of the RMB exchange rate since January. The US dollar has broken 6.70 (at present 6.68), and the cost of importing cotton has dropped sharply.

Four, the Sino US trade consultation has been releasing good news continuously. Some of the high-grade orders have been returned from Southeast Asia and the fund situation has improved. Downstream foreign trade companies, garment enterprises and cotton textile mills continue to warm up in Europe and America.

A medium-sized trader in Qingdao believes that the fuse leading to a substantial reduction in foreign cotton bonded and spot stocks may be "quota expiration", but the key factor is joint promotion of cotton prices, orders and favorable external markets.