Textile and garment export enterprises should pay attention to chemical ecological safety barriers
In the early stage, the domestic market was under the double protection of adequate cotton supply and cotton rotation, showing a trend of shocks and narrowing the range of shocks. In the second quarter, China entered a small peak of cotton consumption. With the continuous promotion of rotation and the solution of the problem of warehouse receipts moving backwards, Zheng Mian is expected to pull clouds in the near future, which is expected to usher in a wave of periodic rise.
Short-term high volatility in international markets
On the US side, US cotton export is the core driving force to support its cotton price. USDA reported an increase of US cotton export of 40,000 tons to 3.27 million tons in April. As of the week of April 5, US cotton net export sales in 2017/18 totaled 3.54 million tons, fulfilling the USDA export forecast (April) of 108%, which is higher than the five-year average of 12 percentage points. The total volume reached 2.02 million tons, with a shipment rate of 62%, which was lower than the 5-year average of 2 percentage points. The contracted sales of American cotton in 2018/19 were significantly faster than that in the same period of history. However, we note that US cotton exports for 2017/18 reached 3.82 million tons (defined as US cotton exports with the same domestic stocks as last year). Under the premise that shipments continue to be positive, US cotton exports for the next 2017/18 year are likely to continue to increase.
On the Indian side, as of March 31, India's new cotton market of 2017/18 was 4879,000 tons, with a listing progress of 79.7%. The listing rate of cotton in the central region was 78%. The quality of cotton in the later stage of listing in the central region deserves attention. Inventory consumption ratio in India has further declined. Whether the planting area will increase in 2018/19 is still a variable. As India's new cotton market enters the late stage, it will enter a tight supply pattern from June to October 2018, or lead to an increase in domestic cotton prices in India.
Overall, there is support in the short-term international market, which is expected to maintain high volatility.
Structural Demand in the Late Second Quarter of China deserves Attention
This year, textile enterprises are participating in reserve cotton rotation rationally. By April 13, 2017/18, a total of 720,000 tons of reserve cotton rotation were listed, with a total turnover of 411,900 tons and a turnover rate of 57%, of which 275,200 tons of cotton were traded in Xinjiang, with a turnover rate of 99.99%, and 136,700 tons of real estate cotton, with a turnover rate of 30.72%. Overall, the current reserve cotton turnover rate is basically stable at 40% - 60%, the new cotton and reserve cotton price difference game equilibrium point is higher than in previous years, only when the reserve cotton price advantage is greater, the real estate cotton turnover will rebound.
In 2017/18, the quantity of marketable high-quality cotton did not increase significantly compared with the same period last year, resulting in the "sufficient" supply of cotton in the market and the structural shortage still exists. At the same time, due to the obvious expansion of cotton spinning capacity in Xinjiang in recent years, we need to pay attention to whether there will be a local supply and demand gap in Xinjiang in the later period, which will drive up cotton prices.
In summary, although the short-term domestic oversupply situation continues, the weak cotton market contains a stage of rising factors, there is support at the bottom, CF1809 to maintain the pre-support level of 15,200 yuan/ton. April-May is the period of cotton planting in China, the United States and India. It is expected that the realization of planting area in the new year will need the cooperation of weather; warehouse receipts in Xinjiang will continue to flow out; the amount of cotton listed in Xinjiang will be low, and the range of price increase will be expanded. Later bidding enterprises or increasing the intensity of replenishment of cotton stores will guide the change of market sentiment. Zheng Mian is expected to usher in a wave. Gradual rise.