Monthly Report Of Cotton Supply And Demand Situation Analysis In June 2021

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（1） Domestic cotton prices were flat and slightly higher. The domestic economy continued to expand steadily and the textile market operated well. According to the data of the National Bureau of statistics, the purchasing manager index (PMI) of China's manufacturing industry in June was 50.9%, which continued to be above the critical point. Both the production index and the new order index of the textile and clothing industry were in a relatively high boom range of 56.0% and above. A number of policies to ensure supply and price stability were introduced in succession to guide the prices of bulk commodities including cotton to return to the supply and demand fundamentals. The domestic cotton price rose by 0.1% on a month to month basis of 15979 yuan per ton of 3128b grade cotton in June. The increase was 2.4 percentage points lower than that of the previous month and increased by 33.6% year-on-year. The monthly settlement price of the main contract of Zheng Mian Futures (cf109) was 15768 yuan per ton, down 0.1% month on month and up 34.7% year on year.

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（2） International cotton prices rose significantly month on month. In the early part of this month, with the US $6 trillion stimulus plan announced, global inflation expectations rose, the United States Department of agriculture (USDA) significantly reduced the final inventory of U.S. and global cotton, and the number of US cotton export contracts increased, resulting in a continuous rise in international cotton prices. In the middle of the year, under the influence of the Fed's increase in management interest rate and the release of interest rate increase signals, US stocks fell significantly, followed by the decline of international cotton futures spot price. In the late ten days, driven by the rising international grain prices and unfavorable weather conditions in the main cotton producing areas of the United States, international cotton prices rebounded and rose. In June, the average monthly price of cotook a index (equivalent to domestic 3128b cotton) was 94.29 cents per pound, up 3.7% month on month and 39.1% year on year.

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（3） The price difference between domestic and foreign cotton decreased. Cotlooka index (equivalent to 3128b cotton in China) is equivalent to RMB 13357 per ton, which is 2622 yuan lower than that of China cotton price index (ccindex) of 3128b grade per ton, and the price difference is 305 yuan smaller than that of last month. The average price of imported cotton price index (fcindex) m grade (equivalent to domestic 3128b cotton) is 96.23 cents per pound, 1% tariff is reduced to 15208 yuan per ton after CIF, 771 yuan lower than the domestic price, and the price difference is 125 yuan smaller than that of last month; The discount of sliding standard tax is 15460 yuan per ton, which is 519 yuan lower than the domestic price and 83 yuan lower than that of last month.

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（4） From January to may, cotton imports and textile and clothing exports increased year on year. According to customs statistics, China imported 173 000 tons of cotton in May, a decrease of 24.8% on a month on month basis and an increase of 147.4% year on year. The export of textiles and clothing reached US $24.31 billion, up 4.4% month on month and decreased by 17.7% year on year. From January to may, the import of cotton was 1.375 million tons, with a year-on-year increase of 70.1%. The export of textiles and clothing reached 112.68 billion US dollars, an increase of 17.3% year on year.

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（5） The spinning volume decreased and the yarn price rose. According to the data of the National Bureau of statistics, China's yarn output in May was 2.344 million tons, a decrease of 1.6% on a month on month basis, and an increase of 6.0% on a year-on-year basis; From January to may, China's yarn output was 11.09 million tons, with a year-on-year increase of 19.9%. Driven by the rise in raw material prices, yarn prices continue to rise. In June, the average price of 32 Cotton Combed Yarns was 25169 yuan per ton, up 0.9% on a month on month basis and 34.5% on a year-on-year basis.

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（6） ICAC reduces global cotton production and consumption. In June, the International Cotton Advisory Committee (ICAC) predicted that in 2020 / 21, the global cotton output would be 24.32 million tons, with a decrease of 260000 tons and a consumption of 24.81 million tons, a decrease of 160000 tons compared with the previous month, and a trade volume of 9.84 million tons, which was basically the same as that of the previous month. The inventory consumption ratio of global regions except China was 76%.

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（7） It is expected that domestic cotton prices will remain stable in the short term. Domestic market: due to the rapid rise of raw material prices in the early stage, the textile production cost is increased, the short-term cotton purchasing willingness of enterprises is reduced, and the production and sales rate of yarn and cloth are decreased, and the characteristics of off-season are slightly obvious. According to the data of China cotton information network, at the end of May 2021, China's Cotton Industrial inventory was 862400 tons, a small increase on a month on month basis, which was at the highest level in recent five years. According to the survey of the national cotton market monitoring system, the production and sales rates of yarn and cloth in June were 95% and 85%, respectively, 1.4% and 0.419% lower than the previous month. According to the data of the national cotton market monitoring system, as of July 2, China had sold 5.896 million tons of lint cotton, a year-on-year increase of 677000 tons, an increase of 963000 tons compared with the average of the past four years. With 1.375 million tons of imported cotton from January to may, the domestic cotton supply is generally abundant. The steady operation of the domestic economy has led to a sustained and steady growth in the demand for textiles and clothing. According to the data of the National Bureau of statistics, the retail sales of consumer goods in China increased by 25.7% from January to may, and the categories of clothing, shoes, hats and knitwear increased by 39.1% year on year. In the latest China Economic Bulletin released by the world bank, China's economic growth is expected to reach 8.5% this year, up 0.4% from the March forecast. With the continuous development of domestic supply and price policy, domestic cotton prices will continue to run smoothly in the short term. By the end of June, most of the cotton in Xinjiang cotton region was in the period from budding to flowering. International market: the spread of the new coronavirus delta virus strain in India, the United Kingdom, Germany and other places has caused the market to worry about the recovery of the global economy. In July, cotton in the northern hemisphere will enter the critical growth period, and the weather change in the main cotton producing areas will become the focus of the international cotton price trend. Combined with the adjustment of monetary policy of the Federal Reserve and other factors, the operation of global cotton market is still facing greater uncertainty, and the short-term fluctuation of international cotton price will intensify.