In the past week, international spot transactions have remained at a low level. Australian cotton has a small amount of spot sales on a buy-as-you-go basis. The basis difference is at 1450-1550 points (SM 1-5/32), which is slightly improved from the previous period and is similar to that of Brazil. Comparing the basis difference between cotton (900-1000 points) and US cotton (200-250 points), the acceptance of Australian cotton has increased. Although the overall market demand is still sluggish, some new situations have emerged in some regions.
Data from the Bangladesh Export Promotion Agency show that the country’s garment export data increased significantly in July, mainly due to an increase in ready-made garment exports. Among them, the export value of knitted garments increased by 4.3% year-on-year, but whether this trend can be sustained is still questionable, because exporters may rush to concentrate shipments before Eid al-Fitr. In July, Bangladesh’s woven garment exports performed poorly, down 8.43% year-on-year, while home textile exports increased 42.25% year-on-year.
In June, China’s clothing exports fell year-on-year, but the decline was much smaller than that in April and May. The export of knitted clothing decreased by 24.51% year-on-year, and the export value of woven clothing increased by 2.52% year-on-year. At present, the auction of China’s cotton reserves is going smoothly and the market demand is stable.
The volume of Indian CCI cotton auctions is gradually increasing, and domestic traders and textile mills are actively purchasing. At present, the export price of Indian cotton is very low, but the market is also worried that late rainfall in some areas this year may delay the launch of new cotton. Whether the low price can be maintained is still a question, especially for immediate shipment.
In recent months, U.S. cotton prices have remained strong under the support of Chinese demand. The Sino-U.S. trade agreement has prompted China’s cotton imports to concentrate on U.S. cotton, while Brazilian cotton has been temporarily forgotten. Despite this, China’s overall cotton import demand has dropped significantly, so the price difference between Brazilian cotton and US cotton is now close to about 5 cents. With prices low and quality comparable to U.S. cotton, Brazilian cotton exports are expected to reach new highs.
In contrast, Indian cotton exports are also increasing, but the main reason is that CCI offers large discounts to large customers. Quality issues with Indian cotton have limited export demand, so inventories have remained high and difficult to digest quickly. </p
