Monthly Analysis Of Supply And Demand Situation Of Bulk Agricultural Products In January 2020 (Cotton Related Part)

[month Characteristics] domestic and foreign cotton prices are rising.

Unit: yuan / ton,%

Note: the domestic price is the cotton price index (CC Index) 3128B grade cotton sales price, and the international price is the imported cotton price index (FC Index) M grade cotton after tax price (sliding tax).

[late trend] domestic market, most textile enterprises delayed to resume work, short-term cotton prices will decline, and follow up trend depends on the control of the epidemic situation. In the international market, China is the largest cotton consuming country in the world. In the short term, the demand for cotton will be subject to a certain impact, and the international cotton market is facing downward pressure.

[details]

(1) domestic cotton prices are rising. 1 in the first ten months of the month, 500 thousand tons of Xinjiang cotton came into the plan to provide backing support, and Sino US economic and trade negotiations made good progress, and the factors such as the strong willingness to purchase raw materials for enterprises close to holiday, and domestic cotton prices continued to rise. It is just during the spring festival that enterprises stop working and leave, and the spot market transaction is stagnant. The impact of the epidemic on the cotton spot market price this month has not yet been highlighted. Since January 20th, with the spread of the new crown pneumonia epidemic, cotton futures prices have dropped rapidly, and on January 20-23, Zheng cotton futures continued to drop four days. In January, the average monthly price of domestic 3128B cotton was 13827 yuan per ton, up 5.1% from the same month, down 10.8% from the same period. The main contract of Zheng cotton futures CF005 monthly settlement price of 13515 yuan per ton, down 3.4%, down 11.6% over the same period.

(two) the international cotton price is rising. Nakagami Shun, influenced by the good agreement between China and the United States on the first stage trade agreement and the signing of the US Department of agriculture's continuous reduction of global cotton production and the alleviation of the Middle East situation, the international cotton price has continued to rise. In the second half of the year, concerns about China's new crown epidemic were increasing in the international market. ICE cotton futures continued to fall, and international cotton prices fell sharply. In January, the average monthly price of Cotlook A index (equivalent to domestic grade 3128B cotton) was 79.07 cents per pound, up 4.5% from the same month, down 3.9% from the same period.

(three) narrowing the price gap at home and abroad. The Cotlook A index (equivalent to domestic grade 3128B cotton) is equivalent to RMB 12196 yuan per ton, 1631 yuan lower than the Chinese cotton price index (CCIndex) 3128B class per ton, and the spread widen 179 yuan from last month. The imported cotton price index (FC Index) M grade (equivalent to domestic 3128B grade cotton) is 80.09 cents per pound, 1% yuan per ton, 13802 yuan per ton, 1% yuan lower than the domestic price, the price difference narrowed by 117 yuan last month, the price of the sliding tax is 14826 yuan per ton, the price is 999 yuan higher than the domestic price, and the price difference narrowed by 354 yuan from last month.

(four) cotton imports increased year by year in 2019, and exports of textile and clothing decreased year-on-year. According to customs statistics, in December, China imported 154 thousand tons of cotton, an increase of 46.1% compared to the same period, a decrease of 29.8% over the same period last year. In 1-12 months of 2019, China imported 1 million 845 thousand and 600 tons of cotton, an increase of 77.3% compared with the same period last year. The total import of cotton was 1 million 849 thousand tons, an increase of 17.5% over the same period last year. In December, China's textile and apparel exports amounted to 24 billion 954 million US dollars, an increase of 13.1% over the same period, an increase of 7.9% over the same period last year. In 2019 1-12, China's textile and apparel exports totaled 271 billion 840 million US dollars, down 1.9% from the same period last year.

(five) the yarn import ratio increased and the price rose slightly. According to customs statistics, in December, China imported 169 thousand tons of cotton yarn, an increase of 6.3% over the same period, an increase of 6.3% over the same period last year. In 1-12 months, China imported 1 million 960 thousand tons of cotton yarn, down 5.3% from the same period last year. Yarn prices rose slightly, due to the increase in the production and sale rate of gauze. According to the data of China's cotton industry inventory report, the yarn production and sales rate was 98.6% in January 2020, 0.4 percentage points higher than the ring ratio, 94.7% for cloth production and sales and 4.4 percentage points for the chain. In January, the average price of the main representative varieties of 32 Cotton Combed Yarns was 20477 yuan per ton, up 0.9% from the ring, down 10.9% from the same period.

(six) ICAC reduced global cotton production in 2019/20. The International Cotton Advisory Committee (ICAC) predicted in January that the global cotton production decreased by 480 thousand tons to 25 million 920 thousand tons in the year January, of which the United States reduced 150 thousand tons, Pakistan reduced 150 thousand tons, Brazil increased 40 thousand tons, and global cotton consumption was 26 million 200 thousand tons, unchanged from last month. The volume of trade increased by 450 thousand tons to 9 million 410 thousand tons, of which the US exports increased by 300 thousand tons, and Brazil's exports increased by 230 thousand tons. The end of the world inventory was reduced by 440 thousand tons to 18 million tons, and the global inventory consumption ratio outside China was 53%.

(seven) short term domestic and foreign cotton prices are expected to face downward pressure. In the domestic market, provinces and municipalities have launched public health incidents at the first level. Population mobility is limited, and most textile enterprises are delayed to resume work, which will have a certain impact on the export and domestic sales of textile and clothing in the short term. In January 30th, the WHO ranked the new crown epidemic as a public health emergency with international concern. However, it is not recommended to implement travel and trade restrictions, which has a certain role in stabilizing market sentiment. Affected by the worries about the development of the epidemic, it is expected that the domestic cotton prices will decrease in the short term, and the subsequent trend will depend on the control of the epidemic. In the international market, China is the largest cotton consuming country in the world. Considering the reaction of domestic and foreign markets since the outbreak of the epidemic, the demand for cotton will be subject to a certain impact. It is expected that the international cotton market will face downward pressure in the short term.