Cotton Import "Red May" Has Not Yet Been Released. Can June Continue The "Prosperous" Situation?

According to customs statistics, in May 2019, China imported 180 thousand tons of cotton, a flat ratio, an increase of 38.5% over the same period last year. In 2019 1-5, China imported 1 million 20 thousand tons of cotton, an increase of 74.7% over the same period last year. Since 2018/19 (2018.9-2019.5), China has imported 1 million 620 thousand tons of cotton, an increase of 74.8% over the same period last year.

Since July 6, 2018, China has imposed 25% tariffs on imported cotton and cotton. The import price of US cotton has gradually dropped from the "altar". Non US cotton (Brazil cotton, Australia cotton, India cotton, West African cotton and so on) occupy a large share of the market share, and completely replace the US cotton from the high and low grade and quality.

Brazil's exports to China are more likely to exceed 40% or even 50%. In the 2018 year, Australia cotton has been highly appreciated by China's cotton mills and traders, coupled with the stimulation of China's cotton textile industry upgrading and spanformation, and is very optimistic about China's exports. However, India's cotton exports are somewhat "shinby". Especially since May, the cotton price of ICE cotton has dropped down. India's cotton FOB and CNF quotas have also declined comprehensively, including the US cotton, Australia cotton and Brazil cotton. However, the decline is obviously narrower than that of other cotton producing areas. The CNF/CIF price of S-6 is higher than that of Ukrainian cotton, Brazil cotton, non state cotton, inferior to C/A, "the price of goods is not cheap," and competitiveness continues to decline. According to statistics, China's cotton exports to 2018/19 account for 36.1% of Brazil's total cotton exports in the year of 2018/19. If it is not because of the serious shortage of cotton spanportation in Brazil, the imperfect infrastructure such as processing and storage, and the cotton growers in the past 3-4 months,

Cotton import "red May" has not been released. How about the import and customs clearance of Chinese textile enterprises and importers in June? Is it possible to continue the "red hot" situation? According to the survey, imports in June were restricted by the deterioration of Sino US trade negotiations (mutual tariffs), the devaluation of the RMB exchange rate (almost 7), and the domestic cotton consumption's sharp decline. However, the import volume is still worth looking forward to, and it is expected to be between 15-18 tons. The reasons are as follows:

一、6月以來ICE期棉主力合約持續在65-68廂體內盤整(低點64.70，創2016年7月中旬以來新低)，不僅ON-CALL點價合同成交，紡企“逢低吸納”熱情高漲；二、半個多月CF1909合約從12720漲至13845(漲幅8.84%)，引發2018/19年度現貨、儲備棉輪出底價及成交價呼應大漲，內外棉價差縮小，巴西、印度等產地棉花競爭力提高；三、中美貿易戰面臨升級、失控的風險，服裝、棉紡織企業紛紛通過降低產品檔次、減產甚至停產來應對，對高品質高可紡性的澳棉、長絨棉等需求下滑，反而擴大中低品質原料采購以維持生產；四、一些前期受存儲、船期延期的巴西棉合同仍有條不紊執行；五、近一周多來人民幣匯率大幅升值，對做空力量進行圍剿，利于外棉進口。 In June 24th, the central parity of RMB against the US dollar was quoted at 6.8503 yuan, and the "7" broke short.