Cotton Price Difference Between Inside And Outside Big Shopping Opportunity

Affected by the pricing mechanism of reserve cotton rotation, the trend of narrowing of cotton prices between inside and outside is obvious during the turn out.

In the 2016-2018 round, the cotton price difference between inside and outside was less than 1500 yuan, less than 2500 yuan and less than 1500 yuan.

By the end of this week (before the beginning of this week), the average price difference between domestic and foreign cotton was around 1000 yuan / ton.

As shown below, since January this year, with the drop in the price of cotton, the difference between domestic and foreign cotton prices has gradually widened, and the spread has widened from 1000 yuan to 1500 yuan / ton.

From mid February to mid April, the international cotton price rose rapidly under the influence of Sino US trade negotiations, and the internal and external spreads narrowed to around 1000 yuan.

This week (mid May), with the Sino US tariff increase, the price of cotton suddenly plummeted, resulting in a rapid increase in the price of cotton within and outside the country to more than 2000 yuan.

With the issuance of quotas and the decline of ICE futures, the price of imported cotton is generally below 80 cents, and the price advantage is starting to highlight.

According to the quotations of China cotton net's imported cotton, the 1% tariff and sliding tax RMB of Brazil cotton M 1-3/32 were quoted at 13400 yuan and 14500 yuan in May 15th. The price of high-grade India cotton, West African cotton, Brazil cotton and Central Asian cotton is 1000 yuan lower than that of Xinjiang cotton. Textile enterprises have begun to advance the quota ahead of time.

Textile companies generally say that Sino US trade problems are absolutely bad for cotton and cotton yarn clothing. After the big drop in futures market, the enthusiasm of cotton auction in recent years has been somewhat reduced, but the price difference between inside and outside has increased, so that they can at least buy better quality imported cotton, and also solve the problem of domestic cotton resources structure.

Nevertheless, the impact of Sino US trade on market psychology and cotton demand is the biggest and the most important problem.

In the short term or medium to long term, unless the Sino US trade issue is resolved or the global fundamentals of the new year change significantly, the price difference between inside and outside will probably remain at a higher level, which is unfavorable to domestic cotton consumption.