India'S India Cotton Is Still Hard On China'S Exports

According to customs statistics, since July 6, 2018, China imposed a 25% tariff on imports of cotton and cotton. From July 2018 to April 2019, China's imports of cotton and cotton in Brazil increased by 1 million 500 thousand, an increase of 396% and 153% compared to the same period last year, while India cotton imports increased by 1 million packs, an increase of 325%.

If we only look at the growth rate, the performance of India cotton is very good; but if we import quantity from a single month, the growth of India cotton is mainly concentrated in 2-4 months, and the performance of other months can only be described by "poor intentions". India's cotton export volume to India cotton exports to China could increase sharply to 5 million packages (850 thousand tons), which is far from expected. Under the premise of China's introduction of the US cotton import tariff, India cotton has the opportunity to occupy a larger market share in China. However, because of the "high price, low quality and poor reputation", plus the strong competition between Brazil cotton and West African cotton, India cotton exporters and exporters are "good at cards" and "smashed".

So did 2019/20 cotton export to China in India in good performance? It is difficult for me to judge, or it will be "Miss girl's life."

First, can Sino US trade negotiations succeed? With the G20 summit meeting between China and the United States and the resumption of negotiations between China and the US trade representatives, the end of the Sino US trade war is in the common interest of the two peoples and enterprises. Therefore, once the Sino US trade agreement is reached, the Chinese side will abolish tariffs on the US cotton imports in 2019/20 and India cotton or become a supporting role and a running dragon.

Second, Brazil cotton has not only increased its output and quality greatly, but also has an advantage in price, and S-6 has suffered a "cut off" to China's exports. Brazil cotton Exporters Association predicts that the total output of cotton in Brazil will increase to 2 million 640 thousand tons in 2019 (2 million tons in 2018, an increase of 32% over the same period last year), and the yield and quality of Bahia and the state of Georgia are good. Bahia Prefecture not only has a record production but also has good quality, and the substitution for American cotton, Australian cotton and India cotton will continue to increase; from the survey point of view, the cotton base difference of Brazil is relatively low, and the quotation is not only significantly lower than that of C/A, Australia cotton, but also slightly lower than the quality grade of West Africa cotton, India cotton and Ukrainian cotton, and the competitiveness is very strong.

Third, 2019/20 cotton in India in the year of the year was "low cost performance" and gradually abandoned by China, Pakistan, Vietnam and other Southeast Asian cotton mills. As the India government continued to substantially increase MSP (amplitude 10%-15%) in 2019, under the support of "bottom price", India seed cotton and lint cotton will be running at high level. However, due to many factors such as the delayed monsoon, varieties, planting management level and cotton ginning ability, India's Cotton Horse value is large, its strength is low, its impurities are large and its neps are too many to be avoided. With the continuous tension between India and Pakistan, the dependence of cotton mills in Vietnam and other countries to Brazil cotton has been greatly improved, and India cotton is difficult to occupy a "place" in the export market. (Brazil cotton has replaced Australia cotton as the second largest imported variety of Vietnam, and is the fourth largest imported variety of Turkey).

Fourth, the India rupee exchange rate fluctuations against the US dollar are relatively large, which is not conducive to the operation of cotton exports. With the increasing willingness of the European Union and the Federal Reserve to raise interest rates or even to cut interest rates, the Central Bank of China will release liquidity and the renminbi will enter a devaluation channel. Spinning enterprises and traders are more likely to import high-quality and high spinnable machine picked cotton instead of India roller cotton.