Economic Observation: Analysis Of Cotton Market Trend In The Global Industry Market

Since the middle of June, the off-season atmosphere in the textile market has become increasingly apparent, cotton sales have continued to weaken, and the capital market's expectation of cotton production reduction in the new year has cooled, and domestic cotton prices have fallen; At the end of June, with the reports of the decrease of the cotton planting area in China and the United States in 2023, the cotton in ICE period rebounded strongly, and the domestic cotton price fluctuated and rose accordingly.

Since the middle of June, the Federal Reserve has hinted that it will continue to raise interest rates in the future, and the financial and bulk commodity markets have weakened as a whole. The improvement of the weather in the U.S. cotton producing areas has eased the market's worries about its supply prospects. In recent weeks, the weekly export data of U.S. cotton has declined and remained low. Consumption support continues to be insufficient, and international cotton prices have suffered a decline; After the end of June, the international cotton price fluctuated after a strong rebound, as the sales of American cotton rebounded and the 2023 report of American cotton sown area showed a year-on-year decrease of 19%. As of July 10, 2023, the settlement price of the main contract of ICE cotton futures is 79.25 cents/pound, down 0.44% from the middle of June; The international cotton index (M), which represents the average landed price of imported cotton at China's main port, is 93.83 cents/pound, which is converted into 1% tariff, and the import cost is 16350 yuan/ton (excluding port sundries and freight), up 4.02% from the middle of June.

As of July 10, 2023, the settlement price of the main contract of cotton futures in Zhengzhou Commodity Exchange is 16670 yuan/ton, down 1.13% from the middle of June; The national cotton price B index representing the market price of standard lint in the mainland was 17339 yuan/ton, down 0.06% from the middle of June.

The difference between internal and external cotton prices has narrowed

Since the middle of June, the difference between domestic and foreign cotton prices has narrowed due to the rise in international cotton prices, the depreciation of RMB and other factors. As of July 10, 2023, the difference between internal and external cotton prices is 989 yuan/ton, 643 yuan/ton less than that in mid June. At present, the profit of downstream enterprises purchasing imported cotton shrinks.