According to feedback from cotton trading companies in Qingdao, Zhangjiagang, Guangzhou and other places, quotations of Brazilian cotton, US cotton, Indian cotton, West African cotton, etc. have increased significantly due to the December/January shipping schedule (some international cotton merchants and large traders have increased significantly due to the December/January shipping schedule. The cargo signing and transaction in March were not satisfactory, and the shipping date quotation was delayed by 1-2 months); in addition, since mid-November, the port bonded, customs clearance cotton inquiries and shipments have slowed down compared with September and October, so it is expected that in December /Bonded + non-bonded cotton stocks at ports will continue to rise in January and February.
An international cotton trading company in Qingdao stated that from June to October 2020, China signed a total of more than 700,000 tons of US cotton for the 2019/20 and 2020/21 seasons, of which about 47 arrived in Hong Kong from July to October. Ten thousand tons, at least 230,000 tons have not yet been shipped or are in transit; as of the current December/January shipping schedule, the quotations for Brazilian cotton and Indian cotton at China’s main ports are also very large, and the port warehouse has “incomings greater than outgoings” “The trend is relatively obvious. It is expected that the total cotton inventory in Qingdao Port may rise to more than 220,000 tons by the end of December, and the total cotton inventory in major ports across the country may reach 350,000-400,000 tons, with US cotton, Brazilian cotton, and Indian cotton , West African cotton, etc. are mainly used.
Why do port cotton stocks continue to grow recently? Industry analysis mainly has the following four reasons:
First, the cotton import quota within the 1% tariff in 2020 has been basically exhausted. A single 200-ton import contract requires the remaining import quotas of several quotas to make up the amount. ; The sliding quasi-tariff import quota is not only “tailor-made” for textile companies, but also for non-state-owned and processing trade, and the participation of cotton trading companies is obviously insufficient; second, although ICE’s main contract continues to be at 71-73 cents/pound Consolidation, but the basis difference of Brazilian cotton and US cotton has been raised again and again. Even if the March contract fell below 72 cents/pound, the quotations of foreign cotton CNF and CIF are still stable and relatively strong (USD quotations); Third, the prices of Brazilian cotton and US cotton for customs clearance are on the high side. Compared with Xinjiang cotton, they have almost no advantages, and textile enterprises are “less interested in purchasing”. According to the survey, the net weight quotation of Brazilian cotton M 1-1/8 in Qingdao Port on December 7-8 was 15,300-15,400 yuan/ton; the quotation of US cotton 31-3 36 was 15,300-15,400 yuan/ton, while the “Double 28” Xinjiang Mainland warehouse quotations by weight are 14,950-15,100 yuan/ton, and Xinjiang cotton is more cost-effective. Fourth, with the end of Christmas orders, coupled with the shortage of containers at ports, the surge in sea freight, the continued appreciation of the RMB, and the out-of-control COVID-19 epidemic in Europe and the United States, etc. China’s textile and apparel companies are very cautious when accepting foreign trade orders, and the demand for high-quality foreign cotton has dropped. </p
