Effect Of Import Policy On Long Staple Cotton Prices

In recent years, in order to deal with the impact of the epidemic on the real economy, various policies have been put forward to support the real economy, such as interest reduction, growth and tax relief. Today we are concerned about the announcement issued by the State Council on February 18th, "2020" 2, the state Council Tariff Commission on the elimination of marketization of tariffs on us and Canada.

The announcement said that China would no longer impose tariffs on us 301 measures within a certain period of time, and support enterprises to import goods from the United States based on business considerations, including 5201 of the cotton that we did not comb. According to the announcement, the relevant eligible enterprises will be implemented from March 2, 2020. So let's analyze it from a commercial point of view. If cotton is no longer subject to customs duties, which cotton can we buy?

1 fine cotton

At present, the price of 31-3-36 is about 80 cents. According to the 1% tariff import, it is about 13800 per ton, which is about 800 yuan higher than our zhengmian futures price. From the price point of view, the United States cotton is not attractive, so the import of American cotton is not the first choice for enterprises.

2 Pima cotton

At present, the price of the Pima 2-2-48 is about 118 cents per pound. The price is around 20200 yuan. Compared to the 21000-21500 quoted price of our long staple cotton in Xinjiang, the price has obvious advantages. From historical price comparison, it is normal for Pima cotton to cost 1000 yuan / ton more than Xinjiang long staple cotton, and from now on, Pima cotton is cheaper than Xinjiang long staple cotton for nearly 1000 yuan. It can be said that the cost performance is obvious.

From the above prices, we can clearly see that the import advantage of Pima cotton is obvious. The main factor contributing to this situation is the trade war between China and the United States. China is the main consumer of long staple cotton, while the United States is the main exporter of long staple cotton. The trade imbalance leads directly to the imbalance between supply and demand of long staple cotton, resulting in high price of domestic long staple cotton, while low price of international long staple cotton. At a relative historical low. The following picture:

From the valuation point of view, the value of long staple cotton is not as high as that of fine staple cotton, but the price ratio of Pima cotton has been highlighted in terms of price differentials. With the liberalization of the above policies, it is expected that there will be a wave of procurement of Pima cotton and a blessing for our domestic long staple cotton enterprises.