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Why did cotton imports “blow out” in December?



According to customs statistics, my country imported approximately 350,000 tons of cotton in December 2020, an increase of 78% month-on-month and 127% year-on-year. Among them, Indian cotton imports grew rapidl…

According to customs statistics, my country imported approximately 350,000 tons of cotton in December 2020, an increase of 78% month-on-month and 127% year-on-year. Among them, Indian cotton imports grew rapidly (customs clearance, bonded goods, and cargo “three arrows”), The transactions of US cotton, Brazilian cotton, etc. are concentrated on customs clearance cotton, bonded cotton and prompt shipment resources.

From January to December 2020, my country imported a total of approximately 2.16 million tons of cotton, a year-on-year increase of 17.89%. General trade ranked first among the import trade methods, with U.S. cotton, Brazilian cotton, and Indian cotton at the forefront of imports (Australian cotton due to output, Due to factors such as “double decline” in quality, “extremely high prices” and continued tensions between China and Australia, some Chinese buyers have excluded them from their “shopping lists”, causing import volumes and rankings to plummet). A cotton importer in Qingdao said that in 2019 and 2020, my country issued an additional 800,000 tons and 400,000 tons of sliding tariff cotton import quotas respectively, which has a significant stimulating effect on processing trade and improving the competitiveness of gauze. The use of sliding tariff quotas The rate is relatively high, which effectively makes up for the problems such as the insufficient 1% tariff quota, the complexity and variety of cotton used by textile enterprises, and the minimization of costs.

Why did cotton imports blow out in December? The author summarizes the following four points:

First, as the price difference between domestic and foreign cotton narrowed significantly in December, the competitiveness of foreign cotton continued to increase. Recently, the main ICE cotton futures contract entered consolidation after breaking through 80 cents/pound; while the Zheng cotton CF2105 contract opened at 15,500 yuan/ton, and the price difference between domestic and foreign cotton fell from 1,800-2,000 yuan/ton to 1,300-1,400 yuan/ton;

The second reason is that some cotton textile enterprises and importers concentrated on using sliding tariff processing trade quotas and 1% tariff import quotas before the end of December. On the one hand, the remaining quotas in the hands of some import companies in November and December are relatively scattered and low in quantity (only a few tons, a dozen tons, or dozens of tons left). Several companies need to work together to clear customs. However, in the hands of international cotton merchants and large cotton companies, U.S. cotton, Brazilian cotton and other resources are characterized by large batches, large differences, and small single batch quantities. Buyers and sellers “hit it off”; on the other hand, relevant departments have questioned whether the sliding tariff processing trade quota can be extended to use before the end of February 2021. It has not been clarified, and some companies are worried that the quota will be wasted;

Third, affected by factors such as the prevention and control of the new crown epidemic, rising road freight rates, and the relatively sufficient capital flow of Xinjiang cotton companies, the progress of moving medium and high-quality Xinjiang cotton to the mainland in 2020/21 Some are slow, but small and medium-sized textile enterprises that have seen orders pick up and cotton yarn production and sales are booming have turned to port bonded and customs-cleared cotton in order to solve the problem of “waiting for rice to be ready” for raw materials;

Fourth is the negative impact of the U.S. ban on imports of Xinjiang Production and Construction Corps cotton products gradually appear. The order applies to all cotton and clothing, textiles and other cotton products produced by the Xinjiang Production and Construction Corps and its affiliated units. In order to meet the requirements of international brands and retailers, some Chinese export-oriented enterprises and OEMs have to expand their purchases of foreign cotton and reduce the cost of being exported. Risk of seizure. </p

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Author: clsrich

 
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