April Monthly Report: Domestic And Foreign Cotton Futures Weaken Sharply, Cotton Yarn Prices Are Weak.

In April, the NDRC issued 800 thousand tons of cotton import slip quota and the reserve cotton wheel out of the listing to increase the supply pressure of the domestic cotton market. China and Pakistan signed the second stage protocol of the FTA, and Pakistan cotton textile is expected to be included in the tariff reduction scope.

In late April, the international commodity market began to weaken, and ICE futures prices took the lead.

At the beginning of May, when the new round of Sino US economic and trade consultations took place, the United States announced that it would impose a 25% tariff on China's commodities of $200 billion, short-term market risk aversion rose rapidly, and domestic and foreign cotton futures accelerated to fall.

In order to hedge the risk of external shocks and macroeconomic contraction, the central bank has implemented the medium term lending facility (TMLF) successively, and has implemented a lower concessionary deposit reserve rate for some small and medium-sized banks, releasing long-term funds and stabilizing economic growth.

The market will pay close attention to the Sino US trade frictions and the situation of cotton market acceptance under the pressure of increasing domestic supply.

1. Price trend

(1) cotton prices

In late April, the international commodity market risk preference dropped, and ICE futures opened the downlink. In the early May, with the revival of Sino US trade friction, the spot price of cotton futures increased rapidly, and the difference between the inside and outside cotton prices increased by 756 yuan / ton to 1797 yuan / ton, an increase of 576 yuan / ton compared with the same period last year (Table 1, figure 1, figure 2, figure 3).

(two) cotton yarn price

Since April, the price of domestic cotton yarn continues to be weak and downward. The price of India cotton yarn continues to be strong in the early stage. The price of domestic yarn is higher than the average price of foreign yarn 30 yuan / ton, and the price difference between internal and external yarns is reduced by 414 yuan / ton, which is 119 yuan / ton less than that of the same period last year (Table 2, figure 4).

(three) short price difference between cotton, cotton yarn and polyester

In April, the yarn / cotton price difference ratio narrowed by 185 yuan / ton to 7267 yuan / ton, down 427 yuan / ton compared with the same period of last year. The price of polyester staple fiber has dropped, and the polyester cotton price difference ratio has increased by 190 yuan / ton to 7018 yuan / ton, up 277 yuan per ton compared with the crude oil price.

Two, supply and demand situation

(1) global cotton supply and demand

According to the data released by the US Department of agriculture in May 2019, the total output of cotton in the world was 2578.6 tons, which was 1 million 165 thousand tons less than that in 2017/18 year; the world's cotton consumption was reduced by 13 thousand tons; the output of cotton in the world was less than 931 thousand tons (the output of 2018/19 was larger than that required by 221 thousand tons); the output of cotton outside China was more than 1 million 845 thousand tons, which was narrowed by 1 million 316 thousand tons compared with that in 2017/18; in the year of 2019/20, the total output of cotton in the world was 2731.5 tons, which was 1 million 529 thousand tons higher than that in the year of 2018/19; the global cotton consumption was 1 million 529 thousand tons; the global cotton consumption increased by 1 million 529 thousand tons, compared with that in the 2018/19 year; the global cotton output was less than the required tons, which was narrower than that in the year of 2018/19; the output of cotton outside China was more than that of the demand ton; the output of cotton outside China was larger than that of the demand ton, which was larger than that in the 2018/19 year (see the annex for more than 2017/18) in the year of 2018/19 (see Annex 2017/18).

(two) domestic cotton supply and demand

1. Cotton supply

On the 5-10 day of May 2019, the central reserve cotton wheel came out for the first week, with a total listing of 63 thousand and 900 tons, of which 30 thousand and 300 tons of Xinjiang cotton and 33 thousand and 600 tons of real estate cotton.

According to the sampling survey of the national cotton market monitoring system, as of May 10, 2019, cotton picking in the whole country was basically over. According to the prediction of 6 million 105 thousand tons of domestic cotton output in 2018 (the national cotton market monitoring system was forecast in 2019 and April), as of May 10th, the total processing lint 6 million 59 thousand tons (including 510.2 of Xinjiang's processing) was accumulated nationwide, an increase of 108 thousand tons compared with that of the previous year, and 4 million 139 thousand tons of cotton lint (including 3 million 372 thousand tons of Xinjiang sales), which were reduced by 240 thousand tons year-on-year.

2. Cotton demand

According to the statistics of National Bureau of statistics, in March 2019, the output of cotton yarn in the whole country was 1 million 396 thousand tons, and the cumulative output of cotton yarn in 1-3 months was 3 million 599 thousand tons, a decrease of 1.51% over the same period last year. In March, the output of cotton blended yarn was 498 thousand tons, and the total yield of cotton blended yarn was 1 million 290 thousand tons in 1-3 months, 6.27% more than that of the same month in March.

The sampling survey of the national cotton market monitoring system showed that as of the beginning of May, the average daily use of cotton in the sample survey enterprises was about 32 days (including the quantity of cotton imported to the port), an increase of 0.3 days compared with the same period last year. The estimated inventory of the national cotton industry was about 706 thousand tons, a decrease of 2.2% compared with the same period last year. The yarn production and sales rate was 95.1%, down 9.2 percentage points compared with the same period last year, and the inventory was 21 days sales, an increase of 6.6 days compared with the same period last year.

Three. Import and export trade

(1) global survey

1. Cotton exports in major countries (Brazil, Australia and Turkey increased year by year, and US and India decreased year-on-year).

In September 2018 -2019 February, the total number of the top five countries in the world cotton export volume was the base, and the annual ranking was: the United States (39.9%), Brazil (27.2%), Australia (13.6%), India (17.1%), Turkey (2.3%).

Among them, the proportion of exports increased year by year in the countries and regions: Australia (+5.4%), Brazil (+3.6%), Turkey (+1%), and exports accounted for the year-on-year decrease in countries and regions: the United States (-7.8%), India (-2.1%) (chart 6).

2. Imports of clothing from major countries (decreased in Europe compared with last year)

In September 2018 -2019 February, the total number of imports from the top five countries was the base of the world garment imports. The annual ranking was: the United States (39.4%), Europe (41.7%), Japan (12%), South Korea (3.1%), China (2.9%).

Among them, the proportion of imports increased year by year in the countries and regions of the United States (+0.6%), China (+0.3%), Korea (+0.2%), Japan (+0%), and the proportion of imports decreased year by year compared with that of Europe (-1.2%) (chart 7).

(two) China

1, China's cotton imports (total monthly reduction, year-on-year increase).

In March 2019, China imported 152 thousand and 200 tons of cotton, an increase of 45 thousand tons over the same period, an increase of 41.7% over the same period last year.

September 2018 -2019 March, China's cotton imports 1 million 256 thousand and 100 tons, an increase of 569 thousand tons year-on-year, an increase of 82.9% year-on-year (Figure 8).

In September 2018 -2019 March, the main source countries of cotton imports in China were: Brazil (29.8%), Australia (28.6%), the United States (12.5%), India (12.1%), Uzbekistan (2.9%), Greece (2.1%), Benin (2%), Sultan (1.4%).

Among them, the proportion of imports increased year by year in the countries and regions as follows: Brazil (+18%), Australia (+12.3%), India (+4.1%), Benin (+1.2%), Greece (+1.1%), and imports accounted for a year-on-year decrease in countries and regions: the United States (-33.3%), Uzbekistan (-4.9%), Sultan (-0.3%) (Figure 9).

2, China's cotton yarn imports (year-on-year increase in March, year-on-year decrease).

In March 2019, China imported 200 thousand tons of cotton yarn, an increase of 19 thousand tons over the same period, an increase of 10.5% over the same period last year.

In September 2018 -2019 March, China imported 1 million 147 thousand and 200 tons of cotton yarn, representing a year-on-year decrease of 75 thousand tons, representing a year-on-year decrease of 6.1% (Figure 10).

In September 2018 -2019 March, the main source countries of cotton yarn imports in China were Vietnam (39.9%), India (19.1%), Pakistan (12.3%), Uzbekistan (6.7%), Indonesia (6.2%), Taiwan (5.3%), China (3.9%).

Among them, the proportion of imports increased year by year in the countries and regions: Vietnam (+5.2%), Uzbekistan (+1.8%), and imports accounted for the year-on-year decrease in countries and regions: Pakistan (-4.3%), Indonesia (-1.8%), China (-0.5%), Taiwan, China (-0.4%) (Figure 11).

3, China's clothing exports (year-on-year total decreased significantly, exports to the United States increased).

In March 2019, China's clothing exports amounted to US $3 billion 960 million, an increase of US $730 million over the same period, an increase of 22.6% over the same period last year.

In September 2018 -2019 March, China's clothing exports amounted to $39 billion 638 million, representing a year-on-year decrease of US $430 million, representing a year-on-year decrease of 1.1% (Figure 12).

In September 2018 -2019 March, the main destinations of China's clothing exports were: the United States (24.1%), Japan (12.3%), Hongkong (4.4%), South Korea (3.6%), Britain (3.4%), Germany (3.4%), Australia (2.7%), Vietnam (2.2%).

Among them, the proportion of exports increased year by year in the countries and regions of the United States (+2.2%), Japan (+0.3%), South Korea (+0.1%), Australia (+0%), and the proportion of exports decreasing compared with the same period last year: Hongkong (-1.8%), the United Kingdom (-0.7%), Vietnam (-0.3%), Germany (-0.1%) (Figure 13).

(three) the United States

1, US cotton exports (export Vietnam increased year by year, and export to China decreased year by year).

In March 2019, the United States exported 459 thousand and 500 tons of cotton, a decrease of 48 thousand tons compared with the same period last year, a decrease of 9.4% over the same period last year.

In September 2018 -2019 March, the United States exported 1 million 698 thousand and 300 tons of cotton, representing a year-on-year decrease of 284 thousand tons, representing a year-on-year decrease of 14.3% (Figure 14).

In March September 2018, the main destination of US cotton exports was Vietnam (27%), Pakistan (12.8%), China (10.5%), Turkey (7.2%), Indonesia (7.1%), Mexico (6.1%), Bangladesh (5.4%), India (4.2%).

Among them, the proportion of exports increased year by year in the countries and regions: Vietnam (+7.3%), Pakistan (+2.1%), India (+0.4%), Mexico (+0.2%), Bangladesh (+0.1%), and exports accounted for the year-on-year decrease in countries and regions: China (-8.3%), Turkey (-2.2%), Indonesia (-1.5%) (Figure 15).

2, American clothing imports (import in China increased in March)

In March 2019, US apparel imports increased by US $3 billion 168 million, an increase of US $240 million over the same period, an increase of 8% over the same period last year.

In September 2018 -2019 March, US apparel imports amounted to US $27 billion 299 million, representing an increase of US $1 billion 600 million over the same period, representing a year-on-year increase of 6.2% (Figure 16).

In March September 2018, the main source countries of clothing imports in the United States were: China (32.2%), Vietnam (15.8%), Indonesia (4.9%), Honduras (4.8%), Kampuchea (4%), India (4%), Salvatore (3.5%), Bangladesh (3.2%).

Among them, the proportion of imports increased year by year in the countries and regions as follows: Honduras (+0.5%), Vietnam (+0.4%), India (+0.3%), Kampuchea (+0.1%), Bangladesh (+0%), and imports accounted for a year-on-year decrease in countries and regions: Indonesia (-0.3%), China (-0.2%), Salvatore (-0.1%) (Figure 17).

(four) import of European clothing (a small decrease in total year on year)

In February 2019, European apparel imports 3 billion 640 million dollars, a year-on-year reduction of 30 million US dollars, a year-on-year reduction of 0.9%.

In September 2018 -2019 February, European clothing imports amounted to US $25 billion 562 million, representing an increase of US $420 million over the same period, representing a year-on-year increase of 1.7% (Figure 18).

In February September 2018, the main source countries of European clothing imports were: China (31.4%), Bangladesh (22.6%), Turkey (12.8%), Kampuchea (6.6%), India (5.4%), Pakistan (3%), Vietnam (2.7%), Sri Lanka (2.2%).

Among them, the proportion of imports increased year by year in Bangladesh (1.5%), Vietnam (0.3%), Kampuchea (0.1%), and imports accounted for year-on-year reductions in countries and regions: China (-0.8%), Turkey (-0.5%), India (-0.5%) (Figure 19).

(five) imports of clothing in Japan (total year-on-year decrease)

In March 2019, Japanese clothing imports increased by US $1 billion 85 million, an increase of US $130 million over the same period, an increase of 13.1% over the same period last year.

In September 2018 -2019 March, Japanese clothing imports amounted to US $8 billion 451 million, representing an increase of US $480 million over the same period, representing a year-on-year increase of 6% (Figure 20).

In March September 2018, the main source countries of clothing imports in Japan were: China (61.4%), Vietnam (14.5%), Bangladesh (4.7%), Kampuchea (3.9%), Indonesia (3.6%), Thailand (2.8%), Italy (1.8%), Burma (1.6%).

Among them, the proportion of imports increased year by year in the countries and regions as follows: Vietnam (+1.2%), Bangladesh (+1%), Kampuchea (+0.8%), Burma (+0.3%), Italy (+0.1%), Indonesia (+0.1%), and imports accounted for a year-on-year decrease in countries and regions: China (-3.7%) and Thailand (-0.1%) (Figure 21).

(six) India

1. Cotton imports in India (rebounded slightly over the same period).

In February 2019, India imported 14 thousand and 500 tons of cotton, a decrease of 2 thousand tons compared with the same period, a decrease of 14.2% over the same period last year.

In September 2018 -2019 February, India imported 86 thousand and 600 tons of cotton, representing a year-on-year decrease of 46 thousand tons, representing a year-on-year decrease of 34.7% (Figure 22).

In September 2018 -2019 February, the main source countries of cotton imports in India were: the United States (31.2%), Australia (11.9%), Egypt (9.2%), Singapore (5.5%), Greece (4%), Brazil (3.1%), Mozambique (2.2%), Switzerland (2.1%).

Among them, the proportion of imports increased year by year in the countries and regions as follows: Singapore (+5.5%), Greece (+2.3%), Switzerland (+2.1%), Mozambique (+2%), Brazil (+0.5%), and imports accounted for year-on-year reductions in countries and regions: Australia (-11.6%), the United States (-7.6%), Egypt (-0.3%) (Figure 23).

2. Cotton exports in India (total year-on-year decrease)

In February 2019, India exported 92 thousand and 900 tons of cotton, a decrease of 48 thousand tons compared with the same period, a decrease of 34.3% over the same period last year.

In September 2018 -2019 February, India exported 529 thousand and 700 tons of cotton, representing a year-on-year decrease of 63 thousand tons, representing a year-on-year decrease of 10.7% (Figure 24).

In February September 2018, the main destination of India's cotton exports was Bangladesh (34.2%), China (26.4%), Pakistan (18.1%), Vietnam (16.1%), Indonesia (2.1%) and Malaysia (0.8%).

Among them, the proportion of exports increased year by year: China (+17.2%), Pakistan (+1.2%), and exports accounted for the year-on-year decrease in countries and regions: Bangladesh (-7.1%), Indonesia (-4.1%), Vietnam (-2.8%), Malaysia (-1.2%) (Figure 25).

3, India cotton yarn exports (a slight increase in total year-on-year)

In February 2019, India exported 122 thousand and 100 tons of cotton yarn, an increase of 4 thousand tons compared with the same period, an increase of 3.7% over the same period last year.

In September 2018 -2019 February, India exported 713 thousand and 700 tons of cotton yarn, representing a year-on-year decrease of 41 thousand tons, representing a year-on-year decrease of 5.5% (Figure 26).

In September 2018 -2019, February, the main destination of India's cotton yarn export was: China (27.1%), Bangladesh (17.5%), Egypt (5.6%), Pakistan (5.5%), Turkey (4%), Portugal (3.4%), Peru (3%).

Among them, the proportion of exports increased year by year in countries and regions: Bangladesh (+3%), Egypt (+0.6%), Peru (+0.1%), and exports accounted for year-on-year reductions in countries and regions: Turkey (-2.2%), Pakistan (-1.5%), China (-0.6%), Portugal (-0.5%) (Figure 27).

(seven) Australian cotton exports (gross growth over the same period)

In March 2019, Australia exported 34 thousand and 100 tons of cotton, an increase of 30 thousand tons over the same period, an increase of 821.6% over the same period last year.

September 2018 -2019 March, Australia's cotton exports 455 thousand and 400 tons, an increase of 197 thousand tons over the same period, an increase of 76.1% year-on-year (Figure 28).

In September 2018 -2019 March, Australia's main export destination for cotton was: China (47.7%), uncertain countries / regions (20.8%), Vietnam (14.2%), Bangladesh (6.7%), Indonesia (3.5%), Thailand (2.7%), India (1.4%), Japan (1.3%).

Among them, the proportion of exports increased year by year: China (+47.7%), Indonesia (+3.5%), and exports accounted for the year-on-year decrease in countries and regions: uncertain countries / regions (-20%), Bangladesh (-12.4%), Vietnam (-6.7%), Thailand (-3.5%), India (-1.9%), Japan (-1.7%) (Figure 29).

(eight) cotton exports in Brazil (a substantial increase in exports to China)

In April 2019, Brazil exported 71 thousand and 800 tons of cotton, an increase of 43 thousand tons compared with the same period, an increase of 151% over the same period last year.

In September 2018 -2019 April, Brazil exported 1 million 16 thousand tons of cotton, an increase of 211 thousand tons year-on-year, representing a year-on-year increase of 26.2% (Figure 30).

In April September 2018, the main destination of Brazil's cotton exports was: China (36.6%), Indonesia (14.2%), Vietnam (13.2%), Bangladesh (11%), Turkey (5.9%), Malaysia (4.9%), South Korea (4.1%), Pakistan (2.9%).

Among them, the proportion of exports increased year by year in the countries and regions: China (+27.2%); exports accounted for the year-on-year decrease in countries and regions: Vietnam (-7.8%), Turkey (-5.8%), Indonesia (-4.9%), Pakistan (-4.2%), Korea (-2.4%), Malaysia (-2.2%), Bangladesh (-0.4%) (Figure 31).

Four, macro economy

(1) global macroeconomic profile

In April 2019, China and the US manufacturing PMI index declined, while Japan and the euro zone manufacturing PMI index rose.

China's official manufacturing PMI was 50.10, although it fell slightly, but still in the expansion zone.

The purchasing managers' index of Caixin manufacturing industry, which mainly tracks private manufacturing enterprises, is 50.20, down 0.6 percentage points from March, and has been expanding for two consecutive months, but the expansion has weakened.

(Fig. 32, FIG. 33).

(two) domestic financial market situation

In April 2019, the short-term interest rate in the interbank market in Shanghai continued to decline, and the interest rate in the medium and long term began to rise again.

In May 8th, the interbank overnight interest rate in Shanghai was 1.141%, down 29 basis points, down 143 basis points compared to the same period (Figure 34).

At the end of 4 months of 2019 -5, the prospect of Sino US trade and economic consultation was once again overshadowed. The US side announced that it would impose a 25% tariff on 200 billion dollars of Chinese goods, and the RMB exchange rate immediately began to depreciate.

In May 8th, the US dollar was 6.7596 against the central parity, 0.59% against the ring, and 6.16% against the previous year (Figure 35).

(three) global commodity price movements

In late April, international crude oil prices fell sharply, and commodity market risk preferences began to decline.

In May 8th, the CRB index representing global commodity prices closed at 179.75, down 4.74% from a year earlier, down 11.03% compared with the same period last year (Figure 36).