资讯 1 10 英文网 283 Cotton News 604719 Who are buying imported cotton at such a high price? 2022-08-09 15:59:34 shenhe
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Who are buying imported cotton at such a high price?
2022-08-09

According to cotton trading companies in Qingdao, Zhangjiagang and other places, the overall inquiries and transactions of foreign cotton at the port have been relatively sluggish since June, mainly due to the continuous high upside down of price difference between domestic and foreign cotton under the 1% tariff, and unsatisfied new traceability orders such as exports to the United States/European Union, various factors such as the depreciation of the RMB exchange rate and the continuous tightening of credit funds for cotton textile enterprises. 

At present, foreign cotton transactions at the main ports are mainly based on customs clearance RMB quotation resources (basis transaction or a fixed price). Compared with active performance of Brazilian cotton and American cotton, in addition to the significant advantages in prices, customs cleared Indian cotton inventory is mainly based on the CCI rotation resources in 2019/20 and 2020/21, lint grade declined and the spinnability is not very prominent. 

It is understood that on August 4-5, the net weight quotation of customs cleared Indian cotton M 1-5/32 (strength of 28/29GPT) at Qingdao Port was 18,500-19,000 Yuan/ton; that of M 1-5/32 (strength of 28/29GPT) Brazilian cotton was 19,600-20,200 Yuan/ton; while the net weight fixed-price of US cotton 31-3/31-4 36/37 was 20,000-20,500 Yuan/ton (the price difference between customs cleared US cotton and Brazilian cotton has narrowed); the conditioned weight quotations of “double 29” Xinjiang machine-picked cotton in Shandong, Jiangsu and other inland warehouses was only 15,600-15,900 Yuan/ton, and the quotations at home and abroad remain high. However, at present, the sentiment of cotton trading enterprises to maintaining prices has not weakened significantly, and there is still little room for price negotiation, especially for placing orders and short orders. 

So which cotton spinning companies are purchasing such high-priced customs cleared foreign cotton? There are mainly three types according to insiders’ analysis: First, in the second quarter of 2022, textile enterprises that received traceable orders for export to the United States and the European Union but did not have cotton import quotas or had insufficient import quotas directly purchased RMB resources, reducing the need for freight forwarders and customs clearance; second, since the import cost of US cotton and Brazilian cotton under the current 1% tariff and the RMB quotation of foreign cotton that has been cleared at the port are still upside down by 800-1,200 Yuan/ton, if the customs cleared cotton grade and various quality indicators match the export orders of textile enterprises, even cotton spinning enterprises with sufficient 1% tariff quotas will also choose to customs cleared cotton; third, although the current customs cleared cotton and domestic Xinjiang cotton continue to be obviously upside down, the quotation of cotton yarn using imported cotton textiles is not only significantly higher than domestic yarn, but also higher than imported Indian yarn, Vietnamese yarn and Pakistan yarn, the spinning companies are slightly profitable, so a few spinning mills do processing for weaving/fabric companies that receive traceable orders.