According to feedback from several international cotton merchants and import companies, since February, my country’s cotton traders and cotton textile companies have been more enthusiastic and enthusiastic about making inquiries and signing contracts for procurement of Indian cotton in 2019/20 and 2020/21. After the CCI sales benchmark price, MCX cotton futures and Indian domestic cotton spot prices continued to rise with the ICE futures, the price difference between Indian cotton FOB and CNF quotations and US cotton and Brazilian cotton continued to narrow, and the competitiveness declined. Indian cotton cargoes, bonded cotton After a short period of “livelihood”, the transaction gradually turned cold; compared with Brazilian cotton, US cotton, and Xinjiang cotton in mainland China, Indian cotton cleared at the port still has a certain price advantage, so shipments are not weaker than Brazilian cotton. Used in American cotton, West African cotton, etc.
Judging from the quotes of cotton companies, the price of Indian cotton for March/April shipping date M1 5/32 at Qingdao Port on March 15-16 is about 15,700-15,900 yuan/ton; the port spot M1-5/32 Indian cotton is quoted at 16,000-16,200 yuan/ton (CCI cotton is slightly higher at 50-100 yuan/ton); while the spot quotation of M1-1/8 Brazilian cotton of the same quality is as high as 16,300-16,500 yuan/ton.
With the main ICE contract falling below 90 cents/pound and 88 cents/pound, should we continue to sign contracts to purchase Indian cotton? The author believes that we need to wait, the time is not mature, and the reasons are summarized as follows:
First, although India and Pakistan signed a ceasefire agreement, due to the strong domestic opposition, coupled with this year’s Pakistani cotton mills A large number of contracts have been signed to purchase medium and low-quality US cotton, Brazilian cotton, and the cotton planting area in Pakistan is expected to increase significantly in 2021. Therefore, there is little hope of allowing the import of Indian cotton in the short term;
Second, India’s domestic cotton consumption has recovered and grown. With relatively large “moisture content”, export pressure will be greater in 2020/21. Although India’s textile and apparel export data and the balance sheet of the Indian Cotton Production and Consumption Council (COCPC) show that India’s cotton consumption this year is 5.5-5.6 million tons (an increase of 200,000-300,000 tons from the previous forecast), the USDA Counselor in India and India Some cotton mills believe that there is a large deviation in the domestic sales of Indian cotton, and the actual consumer demand should be reduced to 5.134 million tons, a difference of 400,000-500,000 tons;
The third is the phenomenon of “overdraft” of Indian cotton prices so far More obvious. On the one hand, due to the continuous increase of CCI’s benchmark price and the strong speculation on domestic cotton prices in India, inquiries and contracts for shipments and bonded Indian cotton from Indian spin mills, international cotton merchants and other foreign buyers have significantly reduced; on the other hand, India The appreciation of the rupee and the “extremely high” export price of cotton yarn have caused buyers from China, Bangladesh, Vietnam and other countries to be less willing to import Indian cotton and cotton yarn;
Fourthly, the year-on-year growth of Australian cotton in 2020 ( (from 600,000 bales to 2.6 million bales) and the decline in Brazilian cotton planting area and output in 2020/21 are lower than expected. The export of medium and high-quality Indian cotton is facing greater competitive pressure. </p
