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Australian Cotton Exports Dried Up In The Long Run, Looking Forward To The Recovery Of Asian Consumption

2020/9/14 12:42:00 166

Mianao

According to Australian media reports, in the last two weeks, affected by the deterioration of Sino Australian diplomatic and trade relations, China's purchase of Australian cotton in 2021 has almost stopped. As the market has been worried that China will impose sanctions on Australian imports, textile mills and cotton merchants are not willing to order large quantities of long-term Australian cotton. In the past two years, the market share of Brazilian cotton in China has increased greatly, which shows that China's dependence on Australian cotton has been greatly reduced.


However, in the past decade, China's share of Australian cotton exports averaged 53%, and the cost performance of Australian cotton has also improved in recent years. In 2015 / 16 and 2016 / 17, Australian cotton successfully expanded its exports to regions outside China, such as Bangladesh, Vietnam, India and Indonesia. At that time, China's share of Australian cotton exports dropped to about 30%.


Compared with the previous two months, the acceptance of Australian cotton by textile mills in various countries has been significantly improved. The premium of Australian cotton to American cotton decreased, and the price difference with Brazil cotton and West Africa cotton was also narrowing. In the long run, Australian cotton SM 1-5 / 32 is about 800 points higher than Brazil's m1-1 / 8 and West Africa's high-grade, and occasionally falls below 500 points.


Because American cotton has large ready-made customers such as China, Australian cotton can only find opportunities in Brazil, West Africa and other varieties, which can usually be sold to Vietnam, Bangladesh and Indonesia at very low prices. If cotton consumption outside China really recovers, Australian cotton exports may recover in 2021. If the yield of Australian cotton is expected to further improve, the basis of Australian cotton is expected to decrease by 100-200 points.


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