International Cotton Spot Trading Is Still In The Doldrums Waiting For Sino US Agreement

In the past week, ICE futures were stable, with the main contract in December falling 0.26 cents, or 0.4%, and 6.6% in the past four weeks. Before the signing of the agreement between China and the United States, the market was off the market. The international market demand was generally limited. Only Pakistan had a large number of imports of cotton, especially cotton and Brazil cotton, and Limited procurement in Bangladesh and Vietnam because of the reduction in domestic cotton production.

At present, the international spot trading is still relatively low. The optimism of the US China agreement has begun to fade, and the textile factory has a wait-and-see attitude towards procurement. Rumor has it that China bought a lot of Brazil cotton last week, but the market again focused on renegotiation and breach of contract.

After continuous rainfall in India, the textile mill is more popular with high-grade cotton. However, cotton production in India will be much higher than that in the previous year, and prices have started to go down. India's Cotton Corp may buy large quantities after Diwali, but it is doubtful whether cotton prices will stop. At present, India cotton has regained competitiveness in the international market. Cotton prices in other regions are rising with ICE futures, and demand for India cotton in China and other regions is likely to recover.

In September, China's demand for cotton imports was low, reflecting the fact that textile production declined. Cotton imports decreased by 11%, down 43% from the same period last year. With the decline of China's reserve cotton inventory, China's demand for imported cotton will increase. However, due to China's 25% tariff on the US cotton, a lot of US cotton is still not shipped in the US warehouse. If the agreement is signed between China and the United States, it may trigger a rebound in shipments to China, and the number of new contracts will be limited.