According to data from the General Administration of Customs, in December 2022, my country’s cotton import volume was 171,000 tons, a month-on-month decrease of 4.1% and a year-on-year increase of 24.9%, continuing the trend of rapid year-on-year growth in cotton imports from September to November (the year-on-year increase from September to November 2022 20.6%, 106.8%, 87.4% respectively).
In that month, Brazilian cotton imports continued to rank first, accounting for 66.9%, which continued to rise from November, while the share of US cotton fell to 28%, and the gap with Brazilian cotton imports widened significantly. Australian cotton’s share dropped from 11 The 3% in September expanded to 3.6%, ranking third, followed by Myanmar, Kazakhstan, etc., which did not import Indian cotton.
Several cotton trading companies in Qingdao, Zhangjiagang and other places said that although the increase in the proportion of cotton imports from southern hemispheres such as Brazil and Australia in December was expected, Brazilian cotton accounted for more than 2/3 of the month’s imports and the proportion of US cotton shrank. The size is still somewhat surprising.
Analysts from some cotton-related companies believe that the proportion of U.S. cotton imports in December dropped from 51.91% and 37% in October and November to 28% for the following reasons:
First, as of mid-January, although the amount of bonded US cotton in China’s main ports is relatively large, the grade and quality indicators are quite different and somewhat confusing. The spinnability and consistency of the 2021/22 US cotton shipped in the middle and late stages are not consistent. It is not ideal. Considering that the sliding tariff quota is valid until the end of December, Brazilian cotton and Australian cotton will be more competitive in the new bonded year, and there will be more “breakthrough” operations by companies.
Second, the price of U.S. cotton in December was higher than that of foreign cotton from other producing areas, putting it at a disadvantage. For example, the current fixed price of bonded 2021/22 US cotton 31-3/31-4 36/37 (or M 1-5/32) in Qingdao Port generally reaches 106-108 cents/pound, which is higher than the 2022 Brazilian cotton M The price of 1-5/32 is about 1-2 cents/pound. For cotton-using enterprises, Meichen cotton is not cost-effective.
Third, the focus of Chinese enterprises’ inquiry and contract purchasing has shifted to the 2022/23 US cotton. Due to the sufficient supply of domestic cotton, lower than expected traceability orders and continued inversion of domestic and foreign cotton prices, Chinese textile companies and traders are paying more attention to US cotton in the 1/2/3 shipping date, and Chen cotton has gradually faded out of sight.
Fourth, due to the impact of precipitation and cooling of U.S. cotton in 2022/23 and other factors, the harvesting, processing, transportation, shipping, etc. are not smooth. In addition, due to the weak indicators such as length and breaking strength of U.S. cotton in the early stage, buyers and sellers There are negotiations to postpone delivery, so very little new cotton for the 2022/23 crop will arrive in Hong Kong in December.