The Consumption Of Xinjiang Cotton In ICE Period Continues To Fall Sharply. It May Be Difficult To Do Anything In The Short Term

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Under the pressure of the continuous sharp drop of cotton in the recent ICE period, the obvious lack of order quality in the "Golden Three Silver Four" cotton textile industry, and the continuous explosive growth of cotton/cotton yarn imports on a year-on-year basis, Zheng Mian also fell passively this week. The main CF2409 contract fell back from 16470 yuan/ton to 15840 yuan/ton, with a much weaker degree and range of decline than the ICE period cotton.

According to feedback from some cotton trade enterprises and ginning plants, the difficulty of inquiry and shipment of Xinjiang cotton in 2023/24 has increased significantly since the middle of April. Some ginning plants and middlemen with low hedging rate can only wait and see, holding goods for sale, the sales progress is still slow, and the increasing trend of capital flow pressure has not improved.

On the one hand, with the current price of domestic cotton falling back, most of the cotton enterprises in Xinjiang are once again in a state of production and sales of lint (especially in northern Xinjiang), which makes it more difficult to sell at the same price, and cotton enterprises are reluctant to sell and hoarding; On the other hand, the "asymmetric and uncoordinated" callback between ICE cotton and Zheng cotton has led to the continuous expansion of the domestic and foreign cotton prices under the 1% tariff (the cost of imported Brazilian cotton is 1200-1500 yuan/ton lower than that of the mainland's Kusinkian cotton). The substantial growth momentum of imported cotton and imported cotton yarn is hard to "brake", and the substitution of domestic cotton yarn is growing, and the consumption impact is growing.

According to customs statistics, China's cotton and cotton yarn imports in March 2024 will be 400000 tons and 190000 tons respectively, with year-on-year growth of 450% and 35.70% respectively; Moreover, as usual, China's cotton textile and clothing industry is about to enter the slack season of domestic demand production and sales, and the proportion of non traceability orders in export orders is relatively low, so Xinjiang's cotton consumption may be difficult to achieve in the short term.