According to feedback from cotton trading companies in Qingdao, Zhangjiagang and other places, the current Brazilian cotton resources for 2019 with shipping schedules in May/August and 2020 with shipping schedules in August/December are relatively large, significantly higher than Australian cotton, Indian cotton, and West African cotton, etc. (especially the May/July shipping schedule of Brazilian aged cotton, with grades ranging from SLM to SM and strength ranging from 27GPT to 31GGPT, achieving full coverage).
However, judging from the quotations of international cotton merchants and large import companies, the “pre-sale” volume of Brazilian cotton in 2020 has decreased to a certain extent compared with June, SM 1-5/32 (SM 36) There are fewer quotations, and the proportion of medium and low-quality Brazilian cotton quotations such as M 1-1/8, M 1-3/32, SLM 1-1/16, SLM 1-1/32 has increased.
Industry analysis shows that on the one hand, due to the fact that the new coronavirus pneumonia in Brazil is completely out of control, land transportation, traders, port shipments, etc. are increasingly affected. Can the August/December shipping schedule of lint be on time? Transportation to the port, loading, and delivery are unknown; on the other hand, some Brazilian exporters and processing companies have reported that the color grade, quality and other indicators of Brazilian cotton in 2020 may be lower than expected, and M 1-1/8 and below grade, length The proportion is expected to increase compared with 2019. Therefore, international cotton merchants and import companies have reduced their quotations for Brazilian cotton in 2020 and are waiting for the results of commodity inspection. Furthermore, the industry is generally worried that due to the severe epidemic in Brazil (the new coronavirus was detected in frozen shrimps produced in South America) ), the possibility of reducing or even suspending imports of Brazilian cotton in the second half of 2020 cannot be ruled out.
From the survey, the current quotations of M 1-1/8 and SLM 1-3/32 Brazilian cotton in Qingdao Port in August/December 2020 are 71.50-72 cents/pound and 71.05 respectively. -71.30 cents/pound, the basis differences are 7.5 cents/pound and 7 cents/pound respectively; while the basis differences of SLM-1-1/16 and SLM 1-1/32 are only 6-6.20 cents/pound , the decrease is very obvious compared with mid-June, and the amplitude generally exceeds 40%.
An international cotton trading company in Qingdao stated that although the basis of Brazilian cotton in 2020 has been continuously reduced, and the basis is 2.5-3.5 cents/pound lower than that of US cotton with July/August shipping schedule of the same quality, competition The strength is still not outstanding (except for the impact of the epidemic), and there are the following three unfavorable factors: First, the first phase of the Sino-US trade agreement is advancing rapidly, and China’s procurement focus has shifted to the 2020/21 US cotton; second, since July 1 China has launched the rotation of a total of 500,000 tons of cotton reserves since 2020, which has been highly favored by enterprises, which is negative for the contracted import of medium and low-quality Brazilian cotton. Thirdly, in the second half of 2020, export orders for textile and clothing exports will recover slowly, and domestic sales will account for a high proportion. Unless agreed in the contract, textile companies will not give “special care” to medium and high-quality Australian cotton, Brazilian cotton, etc. </p
