Market Analysis: Observe The Low Price Difference Between Domestic And Foreign Cotton Due To Tariff

After more than one month of cotton enterprises' reduction of the basis, low price and "packing" sales, the port bonded 2022/23 Brazilian cotton inventory continued to decline (some traders' basis quotations were adjusted to "Buy It Now", with a large margin of preference and margin), and the pressure on cotton enterprises was relieved; With the centralized listing of cotton in the southern hemisphere, the focus of inquiry and procurement of Chinese cotton textile enterprises and traders has shifted to new cotton in 2023/24. The old cotton is increasingly ignored, and it is also difficult to clinch a deal with the list. In addition, the current bonded Brazilian cotton grade, quality indicators, consistency, and short staple rate have declined compared with the medium-term spending, and the matching degree with the import demand of domestic textile enterprises is insufficient. The list The quotation is not easy to clinch a deal.

From the quotation of some traders, the "Buy It Now" price of bonded Brazilian cotton M1-1/8 in Qingdao Port was as low as 77 cents/pound on September 11-13; M1-5/32 (strong 28GPT) net weight picking price is about 79.15-79.65 cents/pound, import cost is 13900-13985 yuan/ton and 14550-14615 yuan/ton under 1% tariff and sliding standard tariff. At present, Henan, Shandong, Jiangsu and other inland warehouses are 3129B (breaking specific strength 28CN/TEX) The official weight quotation of Xinjiang machine-made cotton is 14450-14750 yuan/ton (due to the different stocks of cotton enterprises and processing enterprises, different hedging price levels and different sales strategies, the difference between Xinjiang cotton prices in 2023/24 in the mainland and Xinjiang warehouses is relatively large, and the high and low prices even reach 400-500 yuan/ton). Considering the difference between net weight and official weight settlement, the difference between the internal and external cotton prices under sliding tariff is only 150-450 yuan/ton; Under 1% tariff, the price difference between internal and external cotton is 700-1100 yuan/ton, and the internal and external cotton sagging continues to show signs of narrowing.

For most domestic textile mills, sliding quasi tariff quotas are currently "hot",

First, under the current sliding standard tariff, the price difference between domestic and foreign cotton is low. If the ex warehouse fee, short-term turnover and financial costs are added, the attractiveness of importing Brazilian cotton and American cotton is not enough. Unless the "hard" requirements of export orders (including traceability orders), it is expected that few textile enterprises will adopt sliding tax quota for active customs clearance;

Second, sliding standard tariff uses quota to limit the import of processing trade. For some enterprises mainly engaged in domestic sales or non processing trade, sliding standard tariff quota seems to be "good enough"; If you use quota to import cotton, you need to consider the issue of receiving orders.