Global Ending Inventory Down, Cotton Market Firm

According to business agency data show that this week the cotton market has been rising. On the 7th, the price of 3128b lint was about 16036 yuan / ton, and on the 11th, the price of 3128b lint was 16188 yuan / ton, up 0.95%, 0.6% month on month and 33.67% year on year.

quotations analysis

Domestic: the cotton spot market in June has been in an obvious trend of warming up, China's cotton price index 3128b on the 11th was 16166 yuan / ton. According to the Ministry of agriculture and rural areas, the export situation of textiles and clothing will be better in 2020 / 21, the orders of enterprises will be better than expected, the consumption will be increased by 300000 tons to 8.4 million tons, the import will be increased by 200000 tons to 2.6 million tons, and the final inventory will be reduced to 7.6 million tons. Affected by the new crown epidemic, the export of clothing industry in India and Southeast Asian countries has shrunk seriously, and some textile orders have been transferred to China. Faced with a large number of returned orders, the startup rate of domestic textile enterprises has increased, and some enterprises have even started operation at full capacity. At the same time, textile enterprises have begun to rush to purchase and reserve raw materials, and the price of textile raw materials is also rising.

According to customs statistics, from January to May this year, China's textile and clothing exports reached US $112.69 billion, up 17.3% year-on-year. Among them, textile exports were US $56.08 billion, up 16.1% over the same period in 2019. In May, clothing exports were $12.2 billion, up 37.1% year-on-year.

International: on June 10, 2021, the U.S. Department of Agriculture released the global cotton supply and demand forecast monthly report. In 2021 / 22, the global ending inventory will be reduced by 370600 tons to 19443000 tons. The US cotton supply and demand forecast in 2021 / 22 shows that the export volume will increase by 21800 tons to 3222000 tons compared with the previous month, because the over expected loading volume in the later period of 2020 / 21 will continue after July 31. The output and consumption data of 2021 / 22 are the same as that of the previous month. With the decrease of inventory at the beginning of the period and the increase of export volume, the ending inventory is now reduced by 43600 tons to 631000 tons. Stimulated by data, ice futures rose, while import cotton prices rose simultaneously.

Downstream industry chain

At present, the overall operation of the textile industry is good, enterprises maintain a high operating rate, and the market is expected to issue import quotas. Although the textile industry is in the off-season stage of demand, affected by the new crown epidemic situation, the return order varieties are mainly home textile and pure cotton yarn, followed by clothing and grey cloth. At present, the cotton futures market is at a high level, coupled with the rise in foreign cotton prices, is better than the cotton market. Cotton prices are expected to remain high in the near future.

(source: Business Club)