China’s cotton market supply is tight and balanced in 2016
Abstract: In 2016, institutions, futures companies, cotton finishing companies, traders, and cotton textile mills all believe that cotton supply and demand will be “loose abroad and tight domestically”. “Tight balance” is the consensus of the industry. Some R&D personnel Conclusively list the output, imports, reserve cotton rotation estimates and annual consumer demand to support it, thereby trying to get clues about the rise and fall of cotton prices this year. The author believes that in late November, with the epidemic in Xinjiang and the mainland
In 2016, no matter institutions, futures companies or cotton finishing Enterprises, traders, and cotton textile mills all believe that cotton supply and demand will be “loose abroad and tight domestically”. “Tight balance” is the consensus in the industry. Some R&D personnel have categorically listed the output, imports, and reserves of cotton. We provide estimates and annual consumer demand to support this, so as to try to get clues about the rise and fall of cotton prices this year.
The author believes that in late November, with the end of seed cotton picking and purchasing in most cotton areas in Xinjiang and the mainland, the accuracy of domestic cotton production estimates will be closer to reality and more reliable than in August and September. ; Taking into account the government’s idea of “destocking and striving for self-sufficiency” and the external environment, the cotton import quota for 2017 will still be 894,000 tons (1% tariff), and the “thoughts” of issuing additional trade consolidation or sliding tariff quotas should be discontinued. , but there are variables in supply: first, how much outer yarn will be imported in 2016/17. The impact on the production capacity of domestic small and medium-sized cotton textile mills and the consumption of medium and low-quality cotton also deserves great attention; second, the launch on March 6, 2017 The planned quantity of cotton reserves and the actual transaction status.
The author believes that as of now, the total cotton reserve inventory is about 8 million tons, and the quality can still meet the needs of most textile companies. Therefore, the scale of rotation in 2017 may still be about 2 million tons. So let us make a bold estimate of the total annual cotton supply: 1. The total domestic cotton output in 2016 was about 4.85-4.9 million tons (4.877 million tons according to China Storage Information Center); 2. The total annual import volume was about 1.1 million tons (according to According to customs statistics, my country imported 960,000 tons of cotton in 2015. This year, the number of US cotton contracts signed by Chinese companies increased significantly year-on-year); 3. The scale of rotation is estimated to be 2 million tons. Excluding changes in stocks at the beginning and end of the period, the total cotton supply is about 8 million tons.
How much will my country’s cotton consumption be in 2016/17? If 2015/16 is used as a reference, the impact of imported cotton yarn on the entire consumer market must be taken into consideration. According to customs statistics, my country imported a total of 2.0348 million tons of cotton yarn in 2015/16, down 12.47% year-on-year. However, what needs to be noted this year is that the difference between the current domestic cotton price and the ex-factory price of the Indian S-6 ginning factory is more than 5,000 yuan/ton. The port The price difference between India and Pakistan C32S cotton yarn and domestic yarn is 1,000-1,500 yuan/ton, so the import of cotton yarn is particularly active. The author estimates that the import volume of cotton yarn in 2016 will exceed 2.5 million tons, so cotton consumption will be reduced by 600,000 tons. Above; other 2016 reserve cotton rotation is extended to September, and cotton consumption in 2016/17 should be reduced by 1 month, about 600,000 tons. Therefore, the author estimates that the cotton consumption in 2016/17 is about: 4.75 million tons (total domestic cotton production in 2015) + 960,000 tons (imported) + 2.6 million tons (reserve cotton rotation) – 600,000 tons (outer yarn folded cotton Usage) – 600,000 tons (extension of rotation) = 7.11 million tons.
The author infers that cotton supply exceeds demand in 2016, with a surplus of about 600,000-800,000 tons. However, high-grade and high-quality cotton is likely to have a gap later in the year. After all, this year’s real estate cotton and lint cotton in some cotton areas in southern Xinjiang If the breaking strength and length are “inadequate”, then the demand gap for high-quality cotton will be widened, and the intervention of speculation is likely to become an excuse for rising cotton prices.
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