The Need For Us To Start Tariffs And Exclude Cotton Prices Remains Rational.

According to the information released by the Ministry of Commerce in October 22nd, the US Department of Commerce issued a notice that it will start the elimination procedure for China's 300 billion dollar tariff list from October 31st. From October 31, 2019 to January 31, 2020, the United States interested parties may apply to the US Trade Representative Office (USTR) to exclude applications, including information about the substitutability of the products, whether they have been charged with anti-dumping or countervailing duties, whether they have important strategic implications or are related to the 2025 industrial policies made in China. If the application is approved, the tariffs that have been added since September 1, 2019 can be recalled back.

After thirteenth rounds of high-level consultations between China and the United States, both sides expressed substantial progress in the negotiations. Trump also said that the consultation with China is progressing smoothly, and he hopes to reach the first stage economic and trade agreement next month. Therefore, the start of the tariff exclusion procedure is a prelude to a phased agreement. Although all parties believe that negotiations will still be tortuous, there is still hope for the two sides to reach a partial consensus agreement.

ICE futures closed up yesterday, the cotton contract rose 0.11 cents / pound in December, and the settlement price was 64.67 cents per pound; the highest price of the CF2001 contract was 12850 yuan per ton. Domestic and foreign futures prices rose, the industry's confidence has also been boosted, but from today's Zheng cotton futures market trend, this round of rising performance in general.

According to the views of the parties, there are no major reasons for this sharp increase: first, after a large number of new cotton processing, waiting for the market to be insured, there is greater pressure on the upland of Zheng cotton. Last night, with the rebound of futures, the positions were significantly increased, and the competition between the two sides was fierce, and the pressure on the short sellers could not be underestimated. Two, the price of seed cotton in Xinjiang was rising continuously, and the processing cost of the cotton mill was rising. Some of the listed cotton price quotas rose slightly, and the expected effect of the production reduction in Northern Xinjiang was enlarged. There was a certain driving force for the increase in the market. Three, the domestic downstream demand was sluggish for a long time, and the lint market was hard to sell. At present, the supply chain of the industrial chain is not smooth, and the contradiction between supply and demand is still prominent. Four, there are still some concerns at home and abroad about the differences between the two countries.

On the whole, whether China and the United States can formally sign the agreement or become the key to the medium-term market trend during the APEC summit in Chile in November. In the short term, two directional good comments will boost or boost the stage, but we need to prevent the sharp fall and the repeated setbacks in consultation.