Global Perspective: Analysis On The Future Trend Of Cotton At Home And Abroad

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The global textile market orders decreased significantly, the US cotton production situation remains to be observed, international cotton prices continue to rebound limited.

The CPI of the United States rose by 8.5% year-on-year in July, although slightly narrowed compared with 9.1% in June, the core inflation pressure is still high. The pressure of the Federal Reserve to curb the price rise by raising interest rates continues to exist, and the external environment limits the rebound of cotton prices.

In terms of cotton market, the growth progress of American cotton has been accelerated, and the recent weather drought has led to some adverse conditions.

According to the U.S. Department of agriculture, as of August 8, cotton boll opening rate in the United States was 9%, an increase of 4 percentage points over the same period last year; 31% of American cotton grew well, 7% less than the previous week and 34% lower than the same period last year. India's cotton planting is coming to an end. As of August 5, India's cotton planting area increased by 6.7% year-on-year, according to the Ministry of agriculture. However, the recent drought weather will bring more rain to the cotton growing areas in the United States.

In terms of textile market, under the prospect of economic recession, buyers in terminal consumer countries are cautious about placing orders, and textile orders in most Southeast Asian countries are in a bad situation. Part of the export orders of pannipat, the production center of Indian home textiles, dropped by as much as 40%. In August, orders in Vietnam fell precipitously, and many factories announced layoffs and holidays. The US Department of Agriculture released the latest global cotton supply and demand report tonight. It is expected that the US cotton production will continue to be reduced, or the international cotton price will be supported to some extent. However, the situation of the downstream textile market is weak, and it is expected that the international cotton price will continue to rebound in a limited range.

New cotton purchase price is expected to be weak, domestic cotton price is mainly cautious. The latest report of the central bank shows that we should be alert to structural inflation pressure, not over issue money, increase the implementation of prudent monetary policy, strive to stabilize the macro-economic market, maintain the economic operation in a reasonable range, and strive to achieve the best results.

From the perspective of the cotton market, signs of high yield of new cotton in 2022 are constantly emerging. Considering the overall gloomy situation of the textile market, the market is expected to be weak on the purchase price of seed cotton in the new year. According to the preliminary survey of China cotton net, 48% of the respondents think that the opening price of seed cotton in 2022 will be 5.0-6.0 yuan / kg, and 30% of the respondents think that the opening price will be 6.0-7.0 yuan / kg. Compared with 2021, the price of seed cotton will decrease about 30%.

According to the survey, as the new cotton market is approaching, some early sowing cotton plots in the mainland have begun to be picked sporadically, and Xinjiang hand picked cotton will be gradually mined around the end of August. Some textile enterprises reflect that under the situation that cotton supply will be more abundant, cotton prices may still have room for decline, and enterprises generally hope to concentrate on purchasing new cotton after listing.

From the textile market point of view, the overall atmosphere is still relatively weak, after the early stage of textile enterprises to reduce prices to inventory, the downstream just need to replenish the warehouse, promoting the cotton yarn market sales slightly improved. However, it remains to be seen whether the recovery will continue. In the short term, before the new year's cotton listing, domestic cotton prices are expected to be cautious.