International Cotton Price Weak Oscillation Operation Domestic Cotton Prices Continue To Fall

 

In the international cotton market, in the August, cotton in the northern hemisphere was growing well. As of August 11, 2019, the US cotton growth reached a good rate of 56%, an increase of 16 percentage points over the same period last year. India increased rainfall in July to make up for the drought in June. The 8-9 rainy season is conducive to the growth of India cotton; the southern hemisphere cotton Brazil cotton and West Africa planting area is expected to grow significantly.

 

According to the report issued by the US Department of agriculture in August, it is estimated that the world's cotton output will reach 27 million 348 thousand tons in 2019/20, 5.38% higher than the previous year, 26 million 796 thousand tons of consumption, and the growth rate will slow down to 2%. The output will exceed 552 thousand tons, expanding 221 thousand tons from last month. Affected by the sharp drop in prices of cotton and cotton yarn, the phenomenon of "first loss" of the international cotton yarn appeared, and the buyer actively broke the contract and negotiated the cancellation of goods and bought back frequently. In the context of continued stalemate in Sino US trade frictions, cotton consumption demand is hindered, and international cotton prices may continue to run weak.

 

Domestic cotton prices continue to operate under pressure. With the complex and severe international environment and the downward pressure on domestic economy, the textile industry and consumption declined. In July, the added value of textile industry increased by 1.2% over the same period of last year, down 0.4 percentage points from June, and the number of clothing shoes and hats and needle textiles increased by 2.9% over the same period last year, down 2.3 percentage points from June.

 

According to the national cotton market monitoring system, as of August 16, 2019, the national cotton sales rate in 2018/19 was 81.6%, down 11 percentage points compared to the same period last year, and there were about 1 million 123 thousand tons of new cotton sold for sale (6 million 105 thousand tons) and 490 thousand tons of zhengmian warehouse receipt, which was 25 thousand tons lower than the previous week, more than 73 thousand tons over the same period last year, and less than 1 months in 2018/19. According to the monthly consumption of 665 thousand tons, the current situation of oversupply is obvious. At the beginning of September, new cotton picking began, seasonal supply increased immediately.

 

At present, the repayment period of cotton enterprises is approaching. Downstream textile market is still no improvement, finished product inventory is still high, most of the textile factories in autumn and winter orders less than last year, raw material stock is not active, according to the national cotton market monitoring system survey data, in the early August, the sample survey enterprise yarn and cloth production and sales rates were lower than the nearly 3 years average level of 3.2 and 5.5 percentage points, respectively, the inventory was 3 days higher than the average level of 12.4 days, 11.4 days.

 

As the Sino US trade situation has been repeatedly fermented, market sentiment has been fluctuating in stages, and the overall outlook for textile and clothing exports has been pessimistic. The cotton market may continue to operate under pressure.