Monthly Report On Cotton Situation In China (July 2019)

In July, Xinjiang cotton entered the flowering and boll stage, and most of the mainland entered flowering stage and full bloom stage. The China Cotton Association expects the total output of cotton in China to be 6 million 40 thousand tons, down 1.22% from the same period last year, a decrease of 20 thousand tons compared with the previous period and a 0.5 percentage point decline. Domestic and foreign cotton prices rose first and then fell, but the decrease narrowed, and the difference in cotton prices between inside and outside was basically stable. The turnover of cotton reserves increased. The textile market was flat and the size orders did not increase significantly. The yarn production decreased compared with the same period last year, and the price of the internal and external yarns showed a downward trend. At the end of the year, some textile enterprises need to replenishment, purchase raw materials at low prices, and cotton business inventories fell at the end of the month.

(1) the growth of cotton is not good, and the total production is decreasing.

In July, the climate conditions of all cotton regions in the country were poor, and the overall growth rate was worse than last year. The growth of cotton in Xinjiang cotton area is stable. Due to the low temperature and rainy growth period in 4 and May, the occurrence of diseases and insect pests is relatively light, and the output is expected to be 5 million 140 thousand tons, which is the same as last year's 7-10 days. The mainland is affected by drought and heavy rainfall. The overall growth is poor. The output of the the Yellow River River Basin and the Yangtze River Basin has been lower than that of the previous period. It is estimated that the output of the the Yellow River basin is 380 thousand tons, down 5.6% from the same period last year, and the output of the Yangtze River Basin is 480 thousand tons, down 8.2% from the same period last year.

(two) the price of cotton reserves has increased.

Trade relations between China and the United States are changing frequently, foreign trade orders of textile enterprises are reduced, domestic market is relatively good, demand for low spun yarn is better, and textile enterprises are inclined to purchase low price reserve cotton for processing. The total volume of cotton reserves in July was 245 thousand and 400 tons, an increase of 84 thousand and 100 tons from the previous month, with a turnover rate of 94.17%. The average transaction price was 12805 yuan / ton, down 28 yuan / ton from the previous month.

(three) the overall textile market is flat.

In July, the textile market was still in the off-season, and the industry showed no signs of recovery. The capital pressure of enterprises is large, the follow up order is insufficient, the operating rate remains low, and the use of lint is limited. As of July 31st, the inventory of cotton textile stocks in the textile industry was 705 thousand and 500 tons, an increase of 17 thousand and 500 tons from the end of last month, representing a decrease of 89 thousand and 900 tons compared with the same period last year. Yarn production increased by 2.1%, a year-on-year decrease of 4.9%, and cloth production increased by 1.9%, down 4.5% compared to the same period last year.

According to customs data, exports of textiles and garments showed an upward trend in July, and total exports amounted to US $27 billion 520 million, an increase of 2.08% over the same period last year. Textile exports amounted to 10 billion 770 million US dollars, up 6% over the same period last year, and clothing exports were US $16 billion 750 million, down 0.27% compared to the same period last year.

(four) cotton prices continue to slide, internal and external spreads are basically stable.

In July, the textile market remained weak, cotton prices continued to decline, but the decline narrowed. Cotton sales pressure is still outstanding, the new year cotton will be listed in two months, enterprises to withdraw funds to prepare for the new year seed cotton purchase, had to sell cotton lint. At the end of the month, China's cotton price index (CCIndex3128B) was 14067 yuan / ton, down 122 yuan from the end of last month, and the monthly average price was 14151 yuan / ton, up 5 yuan, down 2060 yuan compared with the same period last year.

The international market maintained a weak pattern, prices continued to decline, and the difference between domestic and foreign cotton prices remained basically stable. China's cotton import price index FCIndexM was 76.78 cents / pound, down 0.74 cents / pound. The end of the month is 76.08 cents / pound, down from 0.55 cents / pound at the end of last month, and 13038 yuan / ton below 1% tariff, which is lower than the 1029 yuan / ton of domestic stock in the same period, which was slightly narrowed by 75 yuan / ton at the end of last month.

(five) increase in commercial inventories.

Sino US trade talks have not yet released a clear signal, textile is still flat, cotton prices are on a downward trend. Textile enterprises purchase cotton at low prices, replenish inventory, and cotton business inventories decrease at the end of the month. According to statistics of China Cotton Association: the total cotton business inventory in the end of July was about 2 million 888 thousand and 100 tons, a decrease of 451 thousand and 100 tons from last month, up 891 thousand and 500 tons compared with the same period last year. Among them, 1 million 824 thousand and 700 tons of cotton in Xinjiang, 377 thousand tons less than the ring, 984 thousand and 800 tons higher than that of the same period last year, 766 thousand and 400 tons of warehouse stocks in the mainland, 105 thousand and 100 tons less than the same month, a decrease of 261 thousand and 700 tons compared with the same period last year, and 297 thousand tons of cotton outside the warehouse in the bonded area, 31 thousand tons more than the same month, an increase of 168 thousand and 400 tons compared with the same period last year.