Domestic Cotton Prices Continue To Rise, And International Cotton Prices Are Slowing Down.

China Cotton Market Weekly (1 -11 October 28, 2019)

This week, domestic cotton prices continued to rise slightly, the international cotton prices rose slowly, domestic cotton yarn prices rose steadily, international cotton yarn prices rose slightly, polyester staple prices continued to fall.

First, domestic cotton prices continue to rise.

This week, Xinjiang's production cut is expected to continue to ferment, pushing domestic cotton prices to continue to rise slightly. October 28, 2019 -11 1, on behalf of the mainland standard grade lint sale price of the national cotton price B index average price of 12800 yuan / ton, compared with last week rose 56 yuan / ton, or 0.44%; Zhengzhou cotton futures contract settlement average price 12987 yuan / ton, compared with last week rose 255 yuan / ton, or 2%; on behalf of the main cotton producing province (area) white cotton 3 grade cotton seed fold cotton average price of Chinese cotton purchase price S index 11727 yuan / ton, compared with last week rose 278 yuan / ton, or 2.43%.

Two, the international cotton prices are slowing down.

This week, the market looks forward to a clearer trade relationship between China and the United States, and the rise of international cotton prices is slowing down. October 28, 2019 -11 1, New York cotton futures contract settlement price of 64.78 cents / pound, compared with last week rose 0.03 cents / pound, or 0.05%, representing the international cotton index (M) 76.24 cents / pound of the average price of China's main port of import cotton, up 0.35 cents / pound compared with last week, up 0.47%, and the cost of import RMB 13487 yuan / ton, up 61 yuan / ton last week, or 0.45% percent; the international cotton price is higher than the domestic cotton price 686 yuan / ton, the price difference expanded by 0.45% yuan / ton last week.

Three, domestic and foreign cotton yarn prices rose slightly

This week, domestic cotton yarn is stable, pure cotton yarn price has steadily increased; international cotton price rise has led to a slight rise in international cotton yarn prices; domestic yarn price advantage is obvious, the average price of conventional domestic yarn is lower than the external yarn 886 yuan / ton; domestic cotton market continues to be weak, pure cotton prices continue downward; polyester staple fiber downstream purchasing prudently, polyester staple fiber quotation is mostly down slightly.

Four, outlook for the future

International cotton prices will again enter the consolidation period. According to the US Department of commerce data, the US GDP growth rate in the third quarter was 1.9%, the first time less than 2% since the fourth quarter of 2018. In order to resist the downside risks, the US Federal Reserve recently announced a 25 point cut in interest rates to 1.50-1.75%, which is the third time the US Federal Reserve has cut interest rates since December 2008. In the international cotton market, the global cotton production is in sight. According to the US Department of agriculture data, as of 27 October, the United States cotton boll opening rate was 95%, an increase of 4 percentage points over the same period last year, and the harvest rate was 46%, an increase of 3 percentage points over the same period last year. The outlook for India's cotton output in the year of 2019/20 is optimistic, and the highest expected output of the market is 20%. The US Department of agriculture predicts that India's cotton output reaches 6 million 640 thousand tons. At present, the central and southern hemisphere of southern hemisphere has entered the sowing period in Brazil. Many farmers are ready to grow cotton in a large scale in 2020 and reduce corn. Before the Sino US relations were unclear, the international spot market remained on the sidelines. Last week, the number of US cotton signed in the United States decreased by 23% last week compared with the previous week. The market in India before the Lantern Festival was cold and cheerless, and only Pakistan imported cotton and Vietnamese yarn in large quantities because of the reduction in domestic cotton production. In recent months, there has been no improvement in the international terminal market fatigue. Vietnam's overseas buyers have delayed the purchase of Vietnamese products. The export volume of Bangladesh in the third quarter has dropped by 1.64% compared with the same period, while T-shirt exports dropped by 7%. It is an indisputable fact that the demand side of the Sino US trade policy has shrunk. The recent cancellation of the APEC meeting in Chile, coupled with the launch of the impeachment investigation procedure of Trump, aggravated the political turmoil in the United States and raised the tension of the market. The short-term international cotton market will fear to enter the wait-and-see consolidation period again.

The domestic cotton market is cautious. According to the statistics of National Bureau of statistics, in October, China's manufacturing industry PMI was 49.3%, down 0.5 percentage points from last month, and the manufacturing industry as a whole has declined. Unlike last month, the large enterprises in October were not running well, and the prosperity of medium-sized enterprises rose. Domestic cotton market, the recent cotton picking into the end, the supply of new cotton gradually increased, according to the national cotton market monitoring system survey data, as of November 1, 2019, the national cotton picking progress 85.5%, an increase of 5.3 percentage points over the same period, the cumulative sale of seed cotton and lint cotton 4 million 309 thousand tons, an increase of 299 thousand tons compared to the same period, of which Xinjiang sold seed cotton and cotton lint 3 million 983 thousand tons. At present, the cotton mill's hedging will increase, making the zhengmian warehouse receipt rebounded significantly. As of November 1st, the number of Zhengshan warehouse warehouse receipts was 406 thousand and 500 tons, an increase of 25 thousand and 400 tons compared with the previous week, which has certain pressure on zhengmian disk. Spot purchases are still cautious. As of November 1st, the national cotton sales rate in the new year was 5.3%, down 4% from the same period last year. Driven by uplink cotton prices, the downstream cotton yarn stabilized, but weaker than cotton. With the end of autumn and winter orders, inventory reduction progress slowed down. The winter cloth orders are coming to an end, and follow up orders are weak. In September 2019, the net import of cotton yarn decreased by 15.52% compared with the previous year. Net exports of pure cotton cloth decreased by 9.01% compared with the previous year. The impact of the cotton textile market is mainly the uncertainty of Sino US trade negotiations, so that the market is cautious to curb the rise in cotton prices. In the near future, in addition to the need to pay attention to the progress of Sino US trade negotiations, we need to pay attention to the performance of the "double eleven" and "Christmas" textile and apparel market this year, as well as the order of the next spring.