ICE Crash Stimulated Price War Intensified

Last week, ICE futures showed signs of stabilization after 66-67 cents, and cotton export market increased. Textile mills began to increase procurement.

Last week, Indonesia's procurement was most active, reaching the peak since the end of January, mainly buying cotton, Brazil cotton and West African cotton.

Imports from India and Bangladesh are also very active.

Australian cotton prices are still high, but the base of M 1-5/32 has started to rise. The base price of Indonesia's offer has reached 1950-2050 points, and the price of SM grade cotton has been reduced, with a base of around 2300.

Brazil cotton logistics pport problem is difficult to solve, warehouse construction will take 12-24 months to complete, the domestic capacity is not able to store large quantities of cotton, so the pressure of sales is still unabated, cotton merchants to promote a lot of efforts, coupled with the sharp decline in ICE futures, so last week Brazil cotton has a large volume of pactions.

At present, the prices of West African cotton and India cotton are already higher than that of Brazil cotton. Moreover, after several weeks' sale, West African cotton has been very tight. The base of SM 1-1/8 has generally risen to 1250-1350 points, 300-400 points higher than Brazil cotton and the US EMOT SM 1-1/8, and the spread of Brazil's SM and M level has also expanded by 200 points.

India S-6 has no market price, the base reaches 1500 points, and domestic spot ex factory price is above 1300 points.

Brazil cotton sells well and there are exchange rate factors.

Recently, Real's exchange rate plummeted, which was close to 4.1117 of the historical low point, stimulating farmers in the country to sell soybeans, cotton and other crops.

At the same time, the Australian dollar has fallen to a new low. However, the sharp decline in domestic output has led to little turnover.

Cotton Traders cut down the US cotton basis and compete with non US cotton in the market outside China, and the price war between cotton and Brazil cotton intensified.