Ministry Of Agriculture And Rural Affairs: Monthly Report On Supply And Demand Situation Of Cotton In October 2019

[month Characteristics] domestic cotton prices fell slightly, and international cotton prices rebounded.

[late trend] domestic market, cotton harvest in the main producing area is coming to an end, new cotton has been listed, cotton supply is abundant, and consumer market has not changed. It is estimated that domestic cotton prices will remain low in the short term. In the international market, Sino US economic and trade consultations are progressing smoothly, supporting cotton prices to rise, but the economic downturn is expected to increase and suppress consumption growth.

[details]

(1) domestic cotton prices fell slightly. This month, the end of the national cotton mill came out, and the supply of cheap cotton decreased, providing a certain support for cotton prices. But new cotton concentrates on the market, Chen cotton stocks are on the high side, and cotton prices are rising slowly. In October, the average monthly price of domestic 3128B cotton was 12723 yuan per ton, down 2.2%, down 20.3% from the same period. Zheng cotton futures contract CF001 yuan settlement price of 13130 yuan per ton, the ring rose 8.6%, down 11.7% over the same period.

(two) the international cotton price is rising. In October, the Sino US trade negotiations made some progress. The United States suspended the 250 billion US dollar tariffs on Chinese commodities that came into effect in October 15th. The optimistic expectation of the international trade situation continued to heat up and promoted the international cotton price to continue to rise. In October, the average monthly price of CotlookA index (equivalent to domestic 3128B grade cotton) was 73.88 cents per pound, up 3.8% from the same month, down 14.9% from the same period.

(three) domestic and foreign spreads continue to shrink. In October, the CotlookA index (equivalent to domestic 3128B grade cotton) was equivalent to RMB 11521 yuan per ton, 1202 yuan lower than the Chinese cotton price index (CCIndex) 3128B level per ton, and the price difference narrowed by 740 yuan from last month. The import cotton price index (FCIndex) M grade (equivalent to domestic grade 3128B cotton) average monthly price 75.27 cents per pound, 1% customs duty down to after tax price of 13120 yuan per ton, 397 yuan higher than the domestic price, the price difference narrowed by 246 yuan last month.

(four) cotton imports and textile and garment exports decreased, compared with year-on-year. According to customs statistics, in September, China imported 83 thousand and 300 tons of cotton, a decrease of 9.3% compared to the same period, a decrease of 38.5% over the same period last year. In 1-9 months, China imported 1 million 517 thousand and 500 tons of cotton, an increase of 36.1% over the same period last year. In September, China's textile and apparel exports amounted to 24 billion 520 million US dollars, a decrease of 4.6% compared to the same period, a decrease of 7.9% over the same period last year. In 1-9, China's textile and apparel exports totaled US $196 billion 901 million, up 26.1% from the same period last year.

(five) the yarn price increases and the yarn price stabilizes. In September, China's yarn production was 2 million 652 thousand tons, an increase of 6.8% compared with the same period, a decrease of 7.5% over the same period last year. Driven by rising cotton prices, cotton yarn prices stabilized. In October, the average price of 32 main cotton varieties was 20221 yuan per ton, which was flat, down 16.2%.

(six) ICAC lowered the expected global cotton consumption in 2019/20. The International Cotton Advisory Committee (ICAC) forecast in October that the world's cotton production in October was 26 million 820 thousand tons, 80 thousand tons less than the previous month, and 26 million 470 thousand tons of consumption, which was reduced by 230 thousand tons from the previous month. The global end of stock adjustment was increased to 18 million 650 thousand tons, and the end of the US stock adjustment increased to 1 million 570 thousand tons.

(seven) it is expected that cotton prices will remain low at home and abroad in the short term. In the domestic market, cotton harvest in the main producing area is coming to an end. New cotton is on the market. The stock of Chen cotton is higher than in previous years. The supply of cotton is abundant, and the consumer market is still in the doldrums. It is expected that the domestic cotton prices will remain low in the short term. In the international market, Sino US economic and trade consultations have progressed smoothly, supporting the rise of international cotton prices. In the long term, the global economic downturn is expected to increase in the 3 quarter, and the purchasing managers' index (PMI) of developed economies such as the US and the EU has dropped to a low level in recent years. ICAC continues to reduce the expected global cotton consumption in 2019/20. The northern hemisphere cotton is concentrated on the market, and the pattern of oversupply is basically formed. Cotton consumption is expected to decrease, and output and inventory pressure will increase.