According to the feedback of cotton trade enterprises in Jiangsu, Shandong and other places, although the cotton inventory (including bonded and non bonded) in China’s main ports has continued to decline since November, and the vacancy rate of some warehouses with slightly deviated locations and inconvenient warehouse in and warehouse out even exceeds 60%, compared with American cotton, African cotton, Indian cotton and other “export exceeds import”, the inventory of Brazilian cotton ports has continued to rise slightly, including resources in 2020, 2021 and 2022. yellow
A cotton trader in the island said that up to now, the Brazilian cotton resources quoted in RMB by ports are relatively small, and the increase of bonded cotton and cargo is relatively prominent. On the one hand, since September, Brazilian cotton will continue to ship to the Chinese market in 2022 (according to statistics, Brazil exported 189700 tons of cotton in September, of which no less than 80000 tons were shipped to China). In the middle of October, Brazilian cotton will successively arrive in Hong Kong and enter the warehouse; On the other hand, due to the large devaluation of the RMB in October and the few cotton import quotas left in the hands of cotton textile enterprises and trade enterprises, Brazil’s cotton customs clearance is not active.
From the market reflection, although the U.S. dollar quotation resources such as bonded Brazilian cotton and shipping goods have continued to increase, and the enthusiasm of domestic enterprises to inquire about and look at goods has also warmed up compared with that in September and October, the actual transaction is still very weak, but it just needs to take the goods in batches and stages. In addition to the low 1% tariff quota and sliding tariff quota, it is also related to the following two factors:
First, the US dollar price of Brazilian cotton is closely linked to that of its competitor, American cotton, and the cost performance ratio needs to be improved. For example, on November 15-16, the basis price of Brazil cotton M 1-1/8 for the shipping date of November/December/January in the main port of China is about 103.80-105.80 cents/pound; The quotation of American cotton 31-3/31-4 36/37 on the same shipping date is only 105.10-107.10 cents/pound, and the consistency, spinnability and delivery capacity of American cotton are stronger than that of Brazilian cotton.
Second, in the near future, a large part of export traceability order contracts explicitly agreed to use “American cotton blending” (including textile and clothing re export trade in Vietnam, Bangladesh, Indonesia and other countries), mainly to avoid the risk of being detained and destroyed by the customs when delivering goods to purchasers in the United States, the European Union and other countries. In addition, the grade and quality indicators of African cotton have been continuously improved in the past two years, and the consistency and spinnability have generally surpassed that of Indian cotton, Pakistani cotton, Mexican cotton, etc., and the substitution of Brazilian cotton and American cotton is becoming stronger and stronger.
Post time: Nov-21-2022