Cotton Import "Red May" Has Not Yet Been Released. Can June Continue The "Prosperous" Situation?

According to customs statistics, in May 2019, China imported 180 thousand tons of cotton, a flat ratio, an increase of 38.5% over the same period last year. In 2019 1-5, China imported 1 million 20 thousand tons of cotton, an increase of 74.7% over the same period last year. Since 2018/19 (2018.9-2019.5), China has imported 1 million 620 thousand tons of cotton, an increase of 74.8% over the same period last year.

Since July 6, 2018, China has imposed 25% tariffs on imported cotton and cotton. The import price of US cotton has gradually dropped from the "altar". Non US cotton (Brazil cotton, Australia cotton, India cotton, West African cotton and so on) occupy a large share of the market share, and completely replace the US cotton from the high and low grade and quality.

Brazil's exports to China are more likely to exceed 40% or even 50%. In the 2018 year, Australia cotton has been highly appreciated by China's cotton mills and traders, coupled with the stimulation of China's cotton textile industry upgrading and spanformation, and is very optimistic about China's exports. However, India's cotton exports are somewhat "shinby". Especially since May, the cotton price of ICE cotton has dropped down. India's cotton FOB and CNF quotas have also declined comprehensively, including the US cotton, Australia cotton and Brazil cotton. However, the decline is obviously narrower than that of other cotton producing areas. The CNF/CIF price of S-6 is higher than that of Ukrainian cotton, Brazil cotton, non state cotton, inferior to C/A, "the price of goods is not cheap," and competitiveness continues to decline. According to statistics, China's cotton exports to 2018/19 account for 36.1% of Brazil's total cotton exports in the year of 2018/19. If it is not because of the serious shortage of cotton spanportation in Brazil, the imperfect infrastructure such as processing and storage, and the cotton growers in the past 3-4 months,

Cotton import "red May" has not been released. How about the import and customs clearance of Chinese textile enterprises and importers in June? Is it possible to continue the "red hot" situation? According to the survey, imports in June were restricted by the deterioration of Sino US trade negotiations (mutual tariffs), the devaluation of the RMB exchange rate (almost 7), and the domestic cotton consumption's sharp decline. However, the import volume is still worth looking forward to, and it is expected to be between 15-18 tons. The reasons are as follows:

一、6月以来ICE期棉主力合约持续在65-68厢体内盘整(低点64.70，创2016年7月中旬以来新低)，不仅ON-CALL点价合同成交，纺企“逢低吸纳”热情高涨；二、半个多月CF1909合约从12720涨至13845(涨幅8.84%)，引发2018/19年度现货、储备棉轮出底价及成交价呼应大涨，内外棉价差缩小，巴西、印度等产地棉花竞争力提高；三、中美贸易战面临升级、失控的风险，服装、棉纺织企业纷纷通过降低产品档次、减产甚至停产来应对，对高品质高可纺性的澳棉、长绒棉等需求下滑，反而扩大中低品质原料采购以维持生产；四、一些前期受存储、船期延期的巴西棉合同仍有条不紊执行；五、近一周多来人民币汇率大幅升值，对做空力量进行围剿，利于外棉进口。 In June 24th, the central parity of RMB against the US dollar was quoted at 6.8503 yuan, and the "7" broke short.