Out of the cotton trade dismal

Traders from many places stated that since mid-August, the spot market has remained deserted. Except for the inquiry and transaction of Australian cotton, Brazilian cotton and a few high-quality US cotton, it is very difficult for cotton from other producing areas to ship. On the one hand, cotton is outside the port. CIF quotes and clearances for high-grade cotton have been significantly higher than the buyer’s psychological tolerance limit (falls of 3-5 cents/lb); on the other hand, cotton demand has been strong in India and Pakistan and other Southeast Asian countries, and the number of CCI auctions is large and transactions are stable. On August 18th, the cumulative volume of CCI deposits has already accounted for 56% of the acquisition volume. Some foreign companies and exporters have paid close attention to transfer to Hong Kong and adjusting shipping destinations.

It is understood that although the phenomenon of transfer of cotton import quotas and agent imports within the 1% tariffs of the domestic market in July and August was becoming less and less (mainly concentrated in several “Zhongzi” head companies and large-scale cotton importers), due to the The quotations continued to be high and the domestic spot price of cotton and cotton continued to drop. Coupled with the strong expectations of new cotton listings in 2015/16 and the low proportion of sales of national reserve cotton, the quota transfer price was the highest in April and May. 2800-3000 yuan / ton fell all the way to the current 1700-1800 yuan / ton (individual ports although the offer is still at 2,000 yuan / ton, but the actual transaction at least lower 100-200 yuan / ton).

The US Department of Agriculture’s August monthly supply and demand report for cotton showed a small profit (decreased supply and reduced supply, while the demand side did not change); bullishness and funds are still positive, so the ICE main contract has remained at a high level, but has Obviously pick up fatigue. Some foreign companies and institutions believe that US cotton and India’s cotton production still has great uncertainty before cotton harvesting, and ICE** will maintain at around 68 cents in the short term, although it is not excluded under the influence of funds and weather factors. A brief upward breakthrough, but China, India oversized cotton stocks, a strong wait-and-see atmosphere in market purchases and sales will seriously limit the room for domestic and foreign cotton prices, and whether ICE can approach and accept 70 cents/lb. Some cotton growers and cotton traders plan that the main contract should be gradually increased in the 68-70 cents/lb market and the pressure on the firm cannot be ignored.