Foreign Trade Information: Ice Pressure Gradually Released After The Results Of Sino US Talks

On March 19, US local time, the high-level talks between China and the United States ended. As expected, the talks did not reach any agreement, and even failed to see what issues the two sides reached a unified view. However, at separate press conferences held after the talks, both sides seemed to believe that the talks were necessary and had achieved their own goals. This is consistent with the views of Cui Tiankai, Chinese ambassador to the United States on March 17.

In a joint interview with Chinese media, Cui Tiankai said that this meeting is the first face-to-face communication between high-level leaders of China and the United States since US President Biden took office. China does not expect a dialogue to solve all problems, and has no high expectations and illusions. He hopes that the talks can become a beginning. Both sides come with sincerity and leave with understanding.

This Sino US meeting not only made the international community more aware of the key points of Sino US differences, but also made both sides more aware of each other's bottom line, which is conducive to handling bilateral relations in the future. The impact on the global economy as a whole, trade, communication and financial, commodity futures and other markets is expected - disappointing but not extraordinary.

On March 19, ice rebounded in a "V" shape. Although the main contracts failed to hold the 85 cents / pound mark, the downward pressure on cotton prices gradually eased with the "neutral" results of the high-level talks between China and the United States and the rise of energy futures such as grain and crude oil, and the atmosphere of accumulation, oscillation and rebound gradually prevailed.

In this regard, some foreign businessmen and institutions are bullish and bullish for the following reasons:

First, China's high-level strategic talks between China and the United States "can not hide the joy". The first phase of Sino US trade agreement has not been affected. China's import of agricultural products to the United States has always been open (including cotton);

Second, the global price of agricultural products continues to rise, and the phenomenon of land competition between grain, cotton, soybean and cotton is staged in various countries around the world. The epidemic spread and natural disasters lead to the shortage of agricultural products, leading to the global shortage of food and agricultural and sideline products. The rising trend is unstoppable. In February 2020, the international sorghum price increased by 82.1%, the international corn price increased by 45.5%, and the international wheat price increased by 19.8%;

Third, the US cotton fundamentals continued to improve, the fund dormant standby. On the one hand, the US cotton in 2020 / 21 is nearly oversold; on the other hand, ice has entered the stage of speculation on weather, planting area and USDA global supply and demand forecast data, especially in the main cotton producing areas;

Fourth, the US fiscal stimulus cannot stop and global inflation is inevitable. With Biden's $1.9 trillion stimulus package passed, the president of the United States is likely to focus on the larger bill, infrastructure, while Democrats are already considering how to spend without Republican support. If the United States invests heavily in infrastructure, R & D technology and education, it can improve productivity from the supply side and accelerate the expectation and risk of global commodity inflation.