According to feedback from cotton trading companies in Qingdao, Guangzhou, Zhangjiagang and other places, the inquiry and shipment of bonded, June/September shipping schedules of US cotton, Brazilian cotton, and West African cotton in the past week have slowed down compared with the previous two weeks, and high-grade, Foreign cotton with high indicators and high water prices is more deserted; shipments are concentrated in medium and low-quality Brazilian cotton, Indian cotton (including 2018/19 old cotton), Mexican cotton, Greek cotton and low-grade American cotton, such as length 1-1 /8 and below; color grade M, SLM grade, etc.; and RMB quotation resources are more concerned and favored.
A cotton company in Zhangjiagang said that some cotton from Togo, Burkina Faso, Benin and Brazil for the June/July shipping schedule is quoted in RMB (the buyer brings his own cotton import quota within 1% tariff). However, US cotton and Indian cotton, whether bonded or spot resources, are mostly quoted in RMB.
The reasons for slightly better inquiries and transactions for low-grade and low-quality foreign cotton are as follows:
First, the current orders from downstream cotton textile and clothing companies are dominated by domestic sales orders in autumn and winter. Mainly, the consumer demand for C21S-C40S and OE yarns is relatively large, the sales of high-count carded and combed yarns continue to be sluggish, and spinners are more “cold” about medium and low-quality cotton;
Second, customs clearance of foreign cotton Most of them adopt “CF2009 + basis” quotation or “fixed price”. Low-grade and low-quality foreign cotton generally have the characteristics of low basis, low premium, and large room for negotiation on actual price. The price difference with high-quality foreign cotton and inland Xinjiang cotton is Continue to expand;
Third, the depreciation of the RMB has led to an increase in the cost of importing foreign cotton, and the competitive advantage of customs clearance of foreign cotton has emerged. In May, the exchange rate of the RMB against the U.S. dollar fell, with the onshore RMB exchange rate falling by 1.33% in a single month, and the offshore RMB against the U.S. dollar as low as 7.1954, approaching the low in early September last year;
Fourthly, compared with the Yellow River Basin , Yangtze River Basin real estate cotton, customs clearance low-quality Brazilian cotton, Indian cotton, American cotton, etc. have the characteristics of large supply, small downgrade and sufficient space for optional goods.
Overall, the current far-month shipping schedule, bonded and customs-cleared cotton transactions and shipments at the port have not improved much due to the slow recovery of domestic downstream consumption, the narrowing of domestic and foreign cotton price differences, and the oversupply of domestic cotton. , pressure on traders continues to accumulate. </p
