China'S Cotton Situation Monthly Report In December: Textile Production And Sales Are Booming, And Cotton Prices Hit An Annual High

China cotton supply and demand balance table (January 2021) unit: 10000 tons

In 2020, the domestic cotton market will be impacted by the new crown epidemic, cotton production will remain stable, the rotation of reserved cotton will be carried out in an orderly manner, the import volume will continue to increase, the market supply will be sufficient, the textile demand will gradually recover, the cotton price will fluctuate and the difference between domestic and foreign cotton prices will increase. According to the Statistics Bureau, the total cotton output in 2020 will be 5.91 million tons, with a year-on-year increase of 0.4%. At the end of the year, the production and sales of textile enterprises were booming, and the output of gauze was on the rise. Driven by epidemic prevention materials, the total amount of textile and clothing exports increased by 9.58% year on year, and the industry trend was better.

In December, the harvest of the whole country was basically completed, and the purchase and processing capacity exceeded last year. A large number of new cotton were listed, textile orders increased, cotton demand recovered, cotton price reached a new annual high, and commercial inventory reached the peak of the year. Due to the price difference between domestic and foreign cotton is higher than 800 yuan / ton, the import of reserved cotton has not been started yet. In December, China Cotton Association conducted a survey on the national cotton planting intention in 2021. The results showed that the cotton planting area in China was 44.836 million mu, with a year-on-year decrease of 2.17%.

1、 New cotton sales progress slightly slower than the same period last year

All cotton picking in China has ended, and the sales progress is slightly slower than last year. Among them, Xinjiang's sales have ended, and there are still some cotton stocks in the mainland that have not been sold. As of the end of December, the national cotton sales progress was 98.2%, a year-on-year decrease of 0.35 percentage points and a month on month increase of 2.78 percentage points. The average selling price was 6.52 yuan / kg, up 19.63% year-on-year and 0.15% month on month.

2、 The processing capacity increased year on year, and the quality index decreased

In December, Xinjiang cotton processing came to an end. The purchase and processing of seed cotton in the mainland continued, and the quality index of new cotton was lower than that of last year. As of December 31, the average purchase price of 3128 grade seed cotton of China's 400 type cotton processing enterprises was 6.58 yuan / kg, up 16.46% year-on-year and 1.64% month on month decrease. The processing capacity was 5.0472 million tons, a year-on-year increase of 5.16%, and a month on month increase of 1.296 million tons.

According to the public inspection data, new cotton quality indicators lower than last year. As of December 31, the national cotton inspection volume was 4.7408 million tons, up 4.14% year-on-year; 84.5% of white cotton was grade 3 or above, down 0.1% year-on-year; 79.12% were fiber length and above, with a year-on-year decrease of 13.85 percentage points; a + B (3.5-4.9) grade accounted for 67.06%, with a year-on-year decrease of 15.89 percentage points; The fracture strength S2 (29.0-30.9) and above accounted for 22.14%, which was 15.59 percentage points lower than that of the previous year.

3、 Domestic cotton prices continued to rise, reaching an annual high

In December, the domestic textile market turned better, with more orders in spring and summer, and the enthusiasm of enterprises in purchasing raw materials warmed up, boosting the continuous rise of domestic cotton price; the international cotton price rose in shock, and the increase was lower than that in China. At the end of December, China's cotton price index (ccindex3128b) was 14963 yuan / ton, which was 312 yuan higher than the end of last month and 1594 yuan / year-on-year; the average monthly price was 14793 yuan / ton, up 260 yuan month on month and 1639 yuan year on year. China's import cotton price index FC index m was 83.12 cents / pound, up 3.81 cents month on month, up 6.17 cents year-on-year. At the end of the month, it was 86.02 cents / pound, higher than 4.26 cents / pound at the end of the previous month, with a year-on-year increase of 6.55 cents. The 1% tariff was reduced to 13894 yuan / ton, which was lower than 1044 yuan / ton of domestic spot goods in the same period. The price difference between domestic and foreign cotton was reduced by 155 yuan compared with the end of last month.

4、 Total commercial inventory reaches annual peak

In December, a large number of new cotton listed, domestic commercial inventory continued to increase, and reached the annual peak. At the end of December, China's total commercial inventory of cotton was about 5.2927 million tons, up 15.8% month on month and 2.05% year-on-year. Xinjiang cotton shipment continued to increase on a month on month basis. In the same month, the export volume of Xinjiang cotton professional warehouse was 483100 tons, an increase of 161500 tons on a month on month basis, higher than 30800 tons in the same period last year.

5、 Textile enterprises are booming in production and marketing

Textile market orders increased, enterprises to move goods smoothly, spinning mill operating rate remained high, cotton demand increased. In December, yarn output increased by 1.3% month on month, 0.8% year-on-year; cloth output increased by 1.5% month on month and 0.9% year-on-year. Although the price of cotton rose, the demand of enterprises increased. At the end of the month, the inventory of cotton industry of textile enterprises was 802300 tons, increased by 74600 tons compared with the end of last month, and increased by 69800 tons on a year-on-year basis.

Customs data show that: in December, China's textile and clothing exports reached 26.2 billion US dollars, a year-on-year increase of 5%; in 2020, China's textile and clothing exports amounted to 291.22 billion US dollars, a year-on-year increase of 9.5%, including textile exports of 153.84 billion US dollars, a year-on-year increase of 29.2%, and clothing exports of $13.78 billion, a year-on-year decrease of 6.4%.

6、 The price difference between domestic and foreign cotton is relatively high, and the rotation of reserved cotton has not been started yet

According to the regulations of "bidding trading measures of Xinjiang cotton rotation in 2020", from December 1, 2020 to March 31, 2021, if the price difference between domestic and foreign cotton is less than 800 yuan / ton, the rotation will be started. However, the price difference between domestic and foreign cotton is between 1400-2100 yuan / ton, and the rotation of reserved cotton has not been started.

7、 In 2021, the national cotton planting intention will decrease by 2.17%

In December, China Cotton Association conducted the first cotton planting intention survey in 2021. The survey results showed that the cotton planting intention area of China was 44.836 million mu, a year-on-year decrease of 2.17%. Among them, cotton planting intention of Xinjiang cotton farmers decreased by 0.85%, and the intention of Yellow River Basin and Yangtze River Basin decreased by 7.12% and 6% respectively. The main reason for the decline of intention is that the Cotton Subsidy in 2020 has not been implemented and the subsidy policy in the coming year is not clear, which leads to the low enthusiasm of cotton planting of cotton farmers. In 2020, the cotton production in the mainland will be greatly reduced, especially in the Yangtze River Basin, where the cotton disaster is serious and the overall income is not high. Nearly 30% of the monitoring households have no clear intention of planting cotton, and are still hovering and waiting.