Cotton Imports Increased By More Than 100% ICE For Two Consecutive Months.

According to customs statistics, the import volume of cotton in China in December 2018 and January 2019 was 220 thousand tons and 280 thousand and 500 tons respectively, up 120% and 109.6% compared to the same period last year. The "blowout" import for two consecutive months led some speculators and cotton enterprises to call "unexpected".

According to the feedback from several large foreign and importing traders, China's cotton imports in February will also be a "leap over" growth situation, because both the sliding tariff of cotton imports in 2018, the 1% tariff import quotas will expire at the end of February, and in the middle of February, the March futures contract of ICE futures will fall below 70 cents / pound key points to stimulate the ON-CALL spot price contract paction and support the "entity" of many funds entering the market.

In line with the substantial increase in China's cotton imports, Vietnam's cotton imports exceeded the 1 million 292 thousand tons in 2017 for the first 10 months of 2018. It is estimated that the actual import volume of Vietnam's cotton will exceed 1 million 550 thousand tons in 2018, an increase of more than 20% over the same period.

A foreign businessman said that the import volume of cotton imports from China, Vietnam and other large cotton producers will increase significantly in 2018/19. In Bangladesh, Pakistan and other Southeast Asian countries, the demand for medium and high quality cotton, Brazil cotton, West African cotton and India cotton will also increase significantly.

For the trend of ICE cotton futures in 3 and April, the industry generally believes that the oscillation is still the "main tone", but the center of gravity gradually moves upward. In May, the expectation of 75 cents / pound on the contract station and closing to the 80 cents / pound integer pass is strong.

In addition to the above mention that China and other textile giants are very much in favor of cotton imports, there are three advantages:

First, Sino US trade negotiations have not been endorsed, but cotton has been included in China's list of US agricultural products.

From the position of the US negotiators and the positive and positive news from both sides, even if the leaders of China and the United States fail to sign the agreement in whole or part of the sea lake farm in late March, they will not change the decision that China will import large quantities of cotton and cotton in order to balance the trade deficit between China and the United States.

In addition, it is not yet clear whether market operation or importing into storage.

Two, India cotton's total output and export capacity continue to "lose its chain", and Australia's drought due to no rain and sandstorm caused by the new cotton outlook is worrying and positive. The main ICE relies on 71 cents / pound rebounding and even reversing.

In the 1-2 month of 2019, due to the fact that there was basically no rainfall in Australia and some cotton continued to be hot, some institutions lowered the output of cotton in Australia to 2 million 200 thousand bales in 2019, while the total cotton production and S-6 quality in India declined sharply in 2018/19, which intensified the supply pressure of high quality cotton in the world.

Three, the bottom up rebound trend of commodity futures is formed, and the pattern of short strength, long and weak continues.

On the one hand, with the withdrawal of the Fed's withdrawal from the table and the slowing down of the interest rate hike, the strong US dollar is facing an inflection point, and the commodity market pressure has been reduced. On the other hand, the global economy is stabilizing and recovering.

In January, China's new social and financial data reached a record high, reaching 4 trillion and 640 billion, an increase of 1 trillion and 570 billion (51%) over the same period last year. Commercial banks have increased their support for enterprises, and the financing sources and capabilities of enterprises, especially small and micro enterprises, have been enhanced. China's economy has taken the lead in "spring blossoms".