Cotton Market: Global Economic Recession Expected To Strengthen Again

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The inflation pressure in Europe and the United States is deeply rooted, the global economic recession is expected to strengthen again, and the international cotton price continues to bear pressure. On Wednesday, the Federal Reserve raised interest rates by 75 basis points for the third time in a row, and hinted that it is likely to raise interest rates at least once again this year. Central banks in many countries have followed the pace of the Federal Reserve to raise interest rates to fight inflation. Yields on us and European bonds hit new highs in recent years.

Cotton market, the northern hemisphere cotton ahead of the market. As of September 19, the harvest of new cotton in the United States has begun, with a progress of 11%, an increase of 3 percentage points over the same period of last year. The US agricultural Counsellor's report shows that cotton yield is expected to increase by 3% due to higher than normal rainfall in India. The production and marketing of textile market is in trouble.

According to the 15th survey report conducted by the International Textile Federation (ITMF), in July this year, the global textile industry operation is expected to turn negative for the first time since May 2021. Textile orders are weakening globally, new orders are deteriorating in all Asian regions, and the situation in North America, South America and Africa is relatively stable. The euro zone consumer confidence index fell to - 28.8 in September from - 25.0 in August. On the whole, in the short term, the future policy tightening path of the Federal Reserve may be more steep than expected. The international market is obviously worried about the global economic recession, and consumption is significantly affected by it. As cotton in the northern hemisphere is listed one after another, the international cotton price continues to be under pressure.

Textile orders declined compared with early September, and domestic cotton prices are expected to remain weak. On September 21, the State Council strengthened the policy support for the smooth operation of the transportation industry, and strengthened the support for the smooth operation of the economy. In terms of cotton market, domestic new cotton is about to enter the harvest peak season, and some parts of Northern Xinjiang are picking cotton by machine.

At present, the cotton price of 7.5 yuan / kg is the mainstream in the Xinjiang market, and the cotton farmers are encouraged by their enthusiasm to pursue higher cotton. However, due to the small proportion of cotton in the total amount, the current price can not represent the overall market price of Xinjiang. From the downstream, some textile mills reflect that the current orders are mainly "double 11" and autumn and winter orders, but the enthusiasm of downstream replenishment has decreased compared with the beginning of September, and there is a general lack of confidence in the future market. It is reported that some overseas customers cancel Christmas orders, and the export situation of textile and clothing is not optimistic.

On the whole, the current downstream consumption shows signs of decline again after a short-term recovery. Most enterprises no longer have expectations for the peak season of gold, silver and silver. In the early stage of a large number of cotton listing in the new year, they are still cautious and wait-and-see, and the domestic cotton price is expected to remain weak.