In 2019/20, the MSP price in India was 5450-5550 rupees/quintal. At present, the purchase price of seed cotton in most cotton areas in India is lower than the MSP standard of 500-1000 rupees/quintal. Therefore, since mid-November, CCI has been purchasing MSP in major cotton-producing areas such as Gujarat, Maharashtra, and Rajasthan. is in full swing.
Affected by negative impacts such as the depreciation of the Indian rupee against the US dollar, the decrease in the basis of Indian cotton, and the tense relations between India and Pakistan, which led to a significant reduction in Pakistan’s imports of Indian cotton, the prices of domestic seed cotton and lint cotton in India continued to double. combined with the expected substantial growth in India’s total cotton production in 2019/20 (the Indian Cotton Association predicts that India’s cotton production in 2019/20 will be 35.45 million bales, an increase of 4.25 million bales, an increase of 13.62%), so CCI’s acquisition volume will be relatively There was significant growth in 2017/18 and 2018/19.
However, Indian cotton-related companies generally believe that CCI is restricted by many conditions such as capital and warehousing. In addition, CCI acquisition has strict requirements on seed cotton moisture regain, quality and other indicators. Therefore, Although CCI is fully engaged in acquisitions, it may still not be able to solve the sales problem of Indian farmers’ seed cotton and lint cotton.
Judging from the quotations of traders in Qingdao, Zhangjiagang and other major ports, the CNF quotations of M 1-1/8 and M 1-5/32 in 2019/20 are concentrated at 73.5- 73.75 cents/pound (the price quoted by international cotton merchants is slightly higher, and the shipping date is December/January), 74.25-74.5 cents/pound, which is 0.8-1.0 cents/pound lower than Brazilian cotton of the same quality and grade; the quoted price is lower than The shipping date for 2019 West African cotton in November/December/January is 0.5-0.8 cents/pound.
Is Indian cotton, which is at a low price point, worth placing a large order for? Most domestic textile companies and traders are cautious and tentative.
First, judging from the feedback from exporters and the results of on-site inspections, due to excessive rainfall in several major Indian cotton areas in 2019/20, although the total output increased, seed cotton, The quality of lint cotton may not be satisfactory, and there is a gap between the actual demand of cotton mills;
Secondly, judging from recent years, most of the Indian cotton shipped and delivered before January has a high value. , high tide resurgence and consistency deviation, so it is best to choose the shipping date in January/February/March;
The third is compared with the quotations of EMOT/MOT and ME in the United States , the advantages of Indian cotton are not obvious. US cotton has low impurities, high consistency, no three-strand yarn, and delivery capacity is not comparable to that of Indian cotton merchants. Therefore, once China-U.S. trade negotiations make significant progress and tariffs on U.S. cotton imports are reduced or eliminated, Chinese companies will still sign contracts to purchase medium- and high-quality U.S. cotton; and the impact of Brazilian cotton and West African cotton on the share of Indian cotton in the Chinese market will increase. Large;
Fourthly, there is a high probability that China’s cotton reserve rotation will start after March 2020. </p
