In June, Domestic Cotton Prices Slowed Down, And Downstream Consumption Remained Weak.

On June 2019, leaders of China and the United States exchanged telephone calls at the G20 summit, and the two sides met to release good news. They said they no longer imposed new tariffs on Chinese goods and resumed economic and trade consultations. Market tension began to ease and international market risk appetite rebounded. The Fed kept its benchmark interest rate unchanged and issued a dovish statement as scheduled, but then the strong US non farm payroll data made it loose again. The US Department of agriculture's latest demand and supply forecast report lowered China's consumption expectation, which showed that the decline trend of cotton textile industry caused by trade friction is increasingly obvious. Zheng cotton futures went down to a low level after experiencing a weak rebound in June, while ICE futures prices were lower in the same period. Recently, Xinjiang's cotton business confidence has recovered, but overall, the market is still worried about the prospects for the negotiations and its long-term impact.

1. Price trend

(1) cotton prices

Since June, domestic cotton spot has slowed down, and the trend is showing signs of stabilization. The price difference between inside and outside cotton is narrowed by 53 yuan to 848 yuan / ton, an increase of 28 yuan / ton compared with the same period last year.

(two) cotton yarn price

Since June, textile enterprises are expected to be pessimistic, domestic cotton yarn prices continue to fall, and the price of domestic yarn is lower than the average price of foreign yarn 586 yuan / ton, narrowing about 95 yuan / ton compared with the same period last year.

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

In June 2019, the domestic cotton yarn price dropped significantly, the yarn cotton price difference was 6842 yuan / ton, the ring ratio narrowed 266 yuan / ton, compared with the same period narrowed 1105 yuan / ton compared with the same period, the polyester staple price rebounded during the same period, the polyester cotton price difference 5758 yuan / ton, the ring ratio reduced by 1299 yuan / ton greatly, reduced 1655 yuan / ton compared with the previous year (Table 3, figure 5).

Two, supply and demand situation

(1) global cotton supply and demand

According to the data released by the US Department of agriculture in July 2019, the total output of cotton in the world was 25 million 980 thousand tons in 2018/19, 971 thousand tons less than that in 2017/18, 26 million 361 thousand tons of global cotton consumption, 349 thousand tons less than that in 2017/18, and 381 thousand tons of cotton production in the world, and 2 million 177 thousand tons of cotton production outside China, narrowing 1 million 4 thousand tons compared with 2017/18.

In 2019/20, the total output of cotton in the world was 27 million 387 thousand tons, an increase of 1 million 407 thousand tons compared with that in 2018/19; the global cotton consumption was 27 million 56 thousand tons, an increase of 695 thousand tons compared with that in 2018/19; the output of cotton in the world is more than 331 thousand tons; the output of cotton outside China is larger than that required by 3 million 107 thousand tons, which is 930 thousand tons more than that in 2018 /19 (see Annex 1).

(two) domestic cotton supply and demand

1. Cotton supply

According to the sampling survey of the national cotton market monitoring system, according to the calculation of the domestic cotton output forecast of 6 million 105 thousand tons in 2018 (the national cotton market monitoring system was forecast in April 2019), as of July 12th, the total processing lint 6 million 94 thousand tons (5 million 102 thousand tons of Xinjiang processed) increased by 15 thousand tons compared with the same period last year. The total sales of 4 million 623 thousand tons of lint (including 3 million 773 thousand tons of Xinjiang sales) were reduced by 539 thousand tons compared with the same period last year.

2. Cotton demand

According to the statistics of National Bureau of statistics, in May 2019, the output of cotton yarn in the whole country was 1 million 310 thousand tons, and the cumulative output of cotton yarn in 1-5 months was 6 million 276 thousand tons, a decrease of 0.20% over the same period last year. In May, the output of cotton blended yarn was 480 thousand tons, and the total yield of cotton blended yarn was 2 million 273 thousand tons in 1-5 months, 2.80% more than that of the same month in May.

The sampling survey of the national cotton market monitoring system showed that as of the beginning of July, the average daily use of cotton in the sample survey enterprises was about 31.5 days (including the quantity of cotton imported to the port), which was reduced by 1.3 days compared with the same period last year. The national cotton industry inventory was estimated to be about 689 thousand tons, a decrease of 11.3% compared with the same period last year. The yarn production and sales rate was 90.8%, down 11 percentage points compared to the same period last year, and the inventory was 29.1 days sales, an increase of 15.3 days compared with the same period last year.

Three. Import and export trade

(1) global survey

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

In April September 2018, the total export volume of the top five countries in the world was based on the total export volume of the world's cotton exports: the United States (47.6%), Brazil (23.8%), Australia (10.9%), India (15.7%), Turkey (1.9%). Among them, the proportion of exports increased year by year: Brazil (+5.8%), Australia (+4.8%), Turkey (+0.7%), and the proportion of exports decreasing compared with the same period last year: the United States (-7.3%) and India (-4.1%) (chart 6).

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

In April September 2018, the total sum of the countries and regions ranked the top five in the world clothing imports was the base. The annual ranking was: US (39.3%), Europe (41.3%), Japan (12.3%), Korea (3.3%), China (3%), -2019. Among them, the proportion of imports increased year by year in the countries and regions of the United States (+0.9%), China (+0.3%), Japan (+0.3%), Korea (+0.2%), and the proportion of imports decreased year by year compared with that of Europe (-1.7%).

(two) China

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

In May 2019, China imported 179 thousand and 800 tons of cotton, an increase of 48 thousand tons over the same period, an increase of 36.5% over the same period last year. In September 2018 -2019 May, China's cotton imports reached 1 million 615 thousand and 700 tons, an increase of 692 thousand tons year-on-year, representing an increase of 75% over the same period last year.

In September 2018 -2019 May, the main source countries of cotton imports in China were: Brazil (26.4%), Australia (24.6%), the United States (15.9%), India (14.5%), Uzbekistan (3.2%), Benin (2.3%), Greece (2%), Sultan (1.7%). Among them, the proportion of imports increased year by year: Brazil (+17.6%), Australia (+11.1%), India (+6%), Benin (+1.5%), Greece (+1.2%), Sultan (+0%), and imports accounted for a year-on-year decrease in countries or regions: the United States (-34.4%) and Uzbekistan (-5.7%).

2, China's imports of cotton yarn (total decrease steadily)

In May 2019, China imported 208 thousand tons of cotton yarn, a decrease of 1 thousand tons compared with the same period last year, a decrease of 0.5% over the same period last year. In September 2018 -2019 May, China imported 1 million 509 thousand and 700 tons of cotton yarn, representing a year-on-year decrease of 36 thousand tons, representing a year-on-year decrease of 2.3% (Figure 10).

In September 2018 -2019 May, China's cotton yarn imports mainly came from Vietnam (39.7%), India (20.9%), Pakistan (10.9%), Uzbekistan (7.6%), Indonesia (6.5%), China Taiwan (5.3%), Malaysia (3.3%). Among them, the proportion of imports increased year by year: Vietnam (+4.7%), Uzbekistan (+2.4%), Malaysia (+1.2%), India (+1%), and imports accounted for a year-on-year decrease in countries or regions: Pakistan (-6.7%), Indonesia (-0.6%), China Taiwan (-0.4%).

3, China's clothing exports (total year-on-year decrease)

In May 2019, China's clothing exports amounted to US $11 billion 210 million, an increase of US $260 million over the same period, an increase of 2.4% over the same period last year. In September 2018 -2019 May, China's clothing exports amounted to 97 billion 643 million US dollars, representing a year-on-year decrease of US $2 billion 200 million, representing a year-on-year decrease of 2.2%.

In September 2018 -2019 May, the main destinations of China's clothing exports were: the United States (22.1%), Japan (11.6%), South Korea (3.8%), Hongkong (3.8%), Germany (3.8%), Britain (3.4%), Vietnam (2.8%), Australia (2.8%). Among them, the proportion of exports increased year by year in the United States (+1.1%), Vietnam (+0.3%), Australia (+0.2%), South Korea (+0.1%), Germany (+0.1%), and exports accounted for the year-on-year decrease in countries or regions: Hongkong (-1.4%), the United Kingdom (-0.8%), Japan (-0.1%) (Figure 13).

(three) the United States

1, US cotton exports (total year-on-year decrease)

In May 2019, the United States exported 398 thousand and 700 tons of cotton, a decrease of 36 thousand tons compared with the same period last year, a decrease of 8.2% over the same period last year. In September 2018 -2019 May, the United States exported 2 million 476 thousand and 200 tons of cotton, representing a year-on-year decrease of 412 thousand tons, representing a year-on-year decrease of 14.3%.

In May September 2018, the main destination of US cotton exports was Vietnam (26.1%), China (11.5%), Pakistan (11.5%), Turkey (9.7%), Indonesia (6.4%), India (5.7%), Bangladesh (5.3%), Mexico (5.1%). Among them, the proportion of exports increased year by year: Vietnam (+6.4%), Pakistan (+1.3%), India (+1.2%), and exports accounted for a year-on-year decrease in countries or regions: China (-5.5%), Indonesia (-2.3%), Turkey (-0.7%), Bangladesh (-0.3%), Mexico (-0.1%).

2, clothing imports in the United States (a small increase in total year-on-year)

In May 2019, US apparel imports increased by US $3 billion 582 million, an increase of US $180 million over the same period, an increase of 5.1% over the same period last year. In September 2018 -2019 May, US apparel imports amounted to US $34 billion 108 million, representing an increase of US $1 billion 930 million over the same period, representing an increase of 6% over the same period last year.

In May September 2018, the main source countries of clothing imports in the United States were: China (30.6%), Vietnam (16%), Indonesia (5%), Honduras (5%), India (4.2%), Kampuchea (4.1%), Salvatore (3.6%), Bangladesh (3.3%). Among them, the proportion of imports increased year by year: Honduras (+0.5%), Vietnam (+0.3%), India (+0.2%), Kampuchea (+0.2%), Bangladesh (+0.1%), and imports accounted for a year-on-year decrease in countries or regions: Indonesia (-0.4%), China (-0.1%), Salvatore (-0.1%).

(four) European clothing imports (total year-on-year basically flat)

In April 2019, European clothing imports were US $3 billion 385 million, which was basically unchanged from the same period last year. In September 2018 -2019 April, European clothing imports amounted to 32 billion 52 million US dollars, representing a year-on-year decrease of US $140 million, representing a year-on-year decrease of 0.4%.

In April September 2018, the main source countries of European clothing imports were: China (29.2%), Bangladesh (23.6%), Turkey (13.2%), Kampuchea (6.3%), India (5.9%), Pakistan (3.1%), Vietnam (2.8%), Sri Lanka (2.3%). Among them, the proportion of imports increased year by year: Bangladesh (+1.4%), Vietnam (+0.3%), Pakistan (+0.1%), and imports accounted for a year-on-year decrease in countries or regions as follows: China (-0.7%), Turkey (-0.6%), India (-0.4%), Kampuchea (-0.1%).

(five) imports of Japanese clothing (a small increase in total year-on-year)

In May 2019, Japanese clothing imports were 863 million US dollars, down 60 million US dollars compared with the same period last year, a decrease of 6.5% over the same period last year. In September 2018 -2019 May, Japanese clothing imports amounted to US $10 billion 386 million, representing an increase of US $450 million over the same period, representing an increase of 4.5% over the same period last year.

In May September 2018, the main source countries of clothing imports in Japan were: China (61%), Vietnam (14.7%), Bangladesh (4.9%), Kampuchea (3.7%), Indonesia (3.5%), Thailand (2.7%), Italy (1.8%), Burma (1.6%). Among them, the proportion of imports increased year by year: Vietnam (+1.5%), Bangladesh (+0.9%), Kampuchea (+0.7%), Burma (+0.3%), Italy (+0.1%), Indonesia (+0.1%), and imports accounted for a year-on-year decrease in countries or regions: China (-4%) and Thailand (-0.1%).

(six) India

1. Cotton imports in India (total year-on-year decrease)

In April 2019, India imported 30 thousand and 100 tons of cotton, a decrease of 6 thousand tons compared with the same period, a decrease of 16.6% over the same period last year. In September 2018 -2019 April, India imported 142 thousand and 500 tons of cotton, representing a year-on-year decrease of 46 thousand tons, representing a year-on-year decrease of 24.5% (Figure 22).

In April September 2018, the main sources of cotton imports in India were: the United States (38.6%), Egypt (13%), Australia (7.9%), Singapore (4.8%), Cote d'Ivoire (4%), Greece (3.2%), Switzerland (3.1%), Holland (2.9%). Among them, the proportion of imports increased year by year: Singapore (+4.4%), Switzerland (+3%), Holland (+2.9%), Cote d'Ivoire (+2.4%), Egypt (+1.9%), Greece (+1.5%), and imports accounted for a year-on-year decrease in countries or regions: Australia (-9%) and the United States (-6.9%).

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

In April 2019, India exported 35 thousand and 900 tons of cotton, a decrease of 104 thousand tons compared with the same period, a decrease of 74.4% over the same period last year. In September 2018 -2019 April, India exported 685 thousand and 300 tons of cotton, representing a year-on-year decrease of 199 thousand tons, representing a year-on-year decrease of 22.5%.

In April September 2018, the main destination of India's cotton exports was Bangladesh (33.1%), China (31.2%), Pakistan (15.5%), Vietnam (13.9%), Indonesia (1.8%) and Malaysia (1.1%). Among them, the proportion of exports increased year by year: China (+22.3%); and the proportion of exports decreasing year by year was: Bangladesh (-5%), Malaysia (-4.6%), Indonesia (-4.2%), Vietnam (-3.4%), Pakistan (-3%).

3, India cotton yarn exports (total year-on-year decrease)

In April 2019, India exported 108 thousand and 500 tons of cotton yarn, a decrease of 22 thousand tons compared with the same period, a decrease of 16.5% over the same period last year. In September 2018 -2019 April, India exported 967 thousand and 200 tons of cotton yarn, representing a year-on-year decrease of 65 thousand tons, representing a year-on-year decrease of 6.3%.

In September 2018 -2019, April, the main destination of India's cotton yarn export was: China (29.5%), Bangladesh (16.1%), Egypt (5.6%), Pakistan (5.2%), Turkey (3.9%), Portugal (3.5%), Peru (2.9%). Among them, the proportion of exports increased year by year: China (+1.9%), Bangladesh (+1%), Egypt (+0.8%), and exports accounted for a year-on-year decrease in countries or regions: Turkey (-2.2%), Pakistan (-1%), Portugal (-0.7%), Peru (-0.1%).

(seven) Australian cotton exports (total year-on-year growth)

In May 2019, Australia exported 35 thousand and 700 tons of cotton, a decrease of 47 thousand tons compared with the same period last year, a decrease of 57% over the same period last year. September 2018 -2019 May, Australia's cotton exports 512 thousand tons, an increase of 156 thousand tons over the same period, an increase of 43.9% year-on-year.

In September 2018 -2019 May, Australia's main export destination for cotton was: China (49.5%), uncertain countries / regions (18.5%), Vietnam (14.1%), Bangladesh (6.7%), Indonesia (3.9%), Thailand (2.5%), Japan (1.4%), India (1.4%). Among them, the proportion of exports increased year by year: China (+49.5%), Indonesia (+3.9%), and exports accounted for the year-on-year decrease in countries or regions: uncertain countries / regions (-26.2%), Bangladesh (-9.3%), Vietnam (-6.1%), Thailand (-2.8%), India (-2%), Japan (-1.3%).

(eight) cotton exports in Brazil (total year-on-year increase)

In June 2019, Brazil exported 61 thousand and 600 tons of cotton, an increase of 53 thousand tons compared with the same period, an increase of 600% over the same period last year. In September 2018 -2019 June, Brazil exported 1 million 182 thousand and 500 tons of cotton, an increase of 350 thousand tons year-on-year, representing a year-on-year increase of 42.1% (Figure 30).

In June September 2018, the main destination of Brazil's cotton exports was: China (35.1%), Indonesia (14.8%), Vietnam (13.1%), Bangladesh (11.3%), Turkey (7.4%), Malaysia (4.5%), South Korea (3.9%), Pakistan (2.6%). Among them, the proportion of exports increased year by year: China (+26%), Bangladesh (+0.1%), and exports accounted for the year-on-year decrease in countries or regions: Vietnam (-7.5%), Indonesia (-4.7%), Pakistan (-4.3%), Turkey (-4.3%), Malaysia (-3.3%), Korea (-2.6%).

Four, macro economy

(1) global macroeconomic profile

In June 2019, the Manufacturing Purchasing Managers Index (PMI) in the US, Japan and the euro area continued to decline in the world's major economies. The PMI of China's official manufacturing industry was 49.4, unchanged from last month. The index of purchasing managers' index (PMI), which mainly tracks private manufacturing enterprises, is 49.40.

(two) domestic financial market situation

In June 2019, the Fed's monetary easing is expected to increase. The Central Bank of China has implemented medium term lending to facilitate the strengthening of liquidity support for small and medium-sized banks. Affected by this, the short-term interest rates in the short-term interbank market in Shanghai are significantly lower, with the rate of interest discounted for a period of 1-6 months falling sharply. In July 8th, the interbank overnight interest rate in Shanghai was 1.848%, down 7.5 basis points, down 21.8 basis points from the same period last year.

In June 2019, the leaders of China and the United States negotiated and negotiated the trade negotiations, the trade frictions were postponed, and the RMB exchange rate devaluation trend in the early stage of the RMB exchange rate basically remained stable. In July 8th, the US dollar traded against the central parity of RMB 6.8925, an appreciation of 0.06%, and a depreciation of 3.75% over the same period last year.

(three) global commodity price movements

In June, the international crude oil price shocks rose. In July 8th, the CRB index, representing the global commodity price trend, closed at 180.68, rising 3.80%, down 8.85% from the same period last year.