Global Observation: The Game Between The United States And Russia Has Led To An Increase In The Pressure On Global Cotton Futures Prices To Decline And Shipments In The Near Future

The weekly settlement price of the main contract of cotton futures this week was 13885, with a weekly increase or decrease of -0.89%; The closing price of spot index 3128B was 15196 yuan/ton, up or down by - 0.54% compared with last week; The closing price of the main contract of cotton yarn futures was 19920, with a weekly increase or decrease of 0.10%. Xinjiang Cotton 21/31 level double 29 corresponds to the price difference of main contract Xinjiang Kuji of 800-1100 yuan/ton, and the price difference of mainland Kuji of 1100-1500 yuan/ton. At present, the market confidence continues to weaken. Textile enterprises have different attitudes towards shipment according to the inventory situation. Some enterprises cut prices to ship. The market price difference of cotton yarn increases, and the price is slightly confused. At present, some textile enterprises can still receive orders, but the duration is relatively short, about half a month, and the price is significantly reduced. Most enterprises have reduced orders and overstocked inventories. With the reduction of cotton prices, the pressure on shipment increases. At present, textile enterprises replenish the inventory at low prices, and purchase whenever needed.

The quotation of imported cotton from China's main ports fell slightly, and the international cotton price index (SM) was 81.15 cents/pound, down 0.05 cents/pound, which was converted into 14368 yuan/ton of general trade port delivery price (calculated at 1% tariff, and the exchange rate was calculated at the middle rate of the Bank of China, the same below); The international cotton price index (M) was 79.91 cents/pound, down 0.07 cents/pound, or 14151 yuan/ton at the general trade port delivery price. Vietnam's cotton blended yarn was generally sold, Cotton mill good quality TCD32S (65/35) knitting bag bleached at about 1.94-1.95 dollars/kg, about 16300-16400 yuan/ton, shipping in January, Sight L/C. The quotation of Uzbek pure cotton yarn is stable, and the price of C32S needle machine dual use bleaching quality FCA (excluding freight) of the yarn mill is 2.38-2.4 US dollars/kg, which is about 20600-20800 yuan/ton. Customs clearance and freight are calculated separately, and the goods will be delivered after payment by car.

　　 Macroscopic aspects ：

Gazprom, Russia's only remaining major bank not yet within the scope of sanctions, was recently included in the financial sanctions list, which led to a sharp drop in the ruble exchange rate. Now the US dollar and the ruble have already been decoupled, and the sharp drop in the exchange rate has no great impact on Russia itself. On the contrary, the goods we import from Russia will be cheaper in the future. Russia is a country that earns foreign exchange by selling resources. Its economic structure is relatively simple. In addition to historical reasons, oligarchs occupy a large amount of resources. The biggest problem is the uneven distribution of wealth. If you do not rely on oligarchs to sell resources, you cannot earn foreign exchange. If you print money to support domestic infrastructure and industries, not only will the exchange rate depreciate, It will also accelerate the transfer of profits made by oligarchs overseas. Before the conflict between Russia and Ukraine, the economy of Russia became worse and worse, GDP growth is also very modest, but since the outbreak of the Russian Ukrainian conflict on February 24, 2022, various sanctions (including freezing foreign exchange and other means) imposed by the United States on Russia have led to the inability of oligarchs to drain their capital, leaving their profits at home (paying taxes and investing in China). At the same time, the war has created many new jobs, which has skewed the distribution of profits towards ordinary people in Russia.

The problem of economic structure has been solved in a disguised way. The economic structure of Russia is getting better and better, but in order to support the front line operations, it can only continue printing money, which eventually leads to its real inflation rate of 11.4% (only second to Venezuela in the world). 7.5% or more is considered hyperinflation. In order to fight against inflation, the benchmark interest rate of Russia has also risen to 21%, which is obviously not a normal interest rate level in a country.

The recent intensification of the conflict is to gain more bargaining chips after the war, as well as for us. The Russian customs recently raised the tariff on Chinese household hardware accessories from 0 to 55%, in order to gain some benefits from all aspects and prepare to stop losses in time. The ultimate goal is not to earn our money by increasing tariffs, but to expect capital investment in RMB.

Today, Russia has a large amount of RMB in its foreign exchange, and the devaluation of the ruble against the US dollar will also lead to a relative devaluation of the RMB. We have local currency swap with the ruble, so the exchange rate of RMB against the US dollar will also be affected, but the advantage is that it will help us to buy cheaper Russian resources in the future. What Trump wants to talk to Russia is not about Ukraine, but whether the ruble will participate in the world settlement system again after the war. If so, it must increase the holdings of US debt.