In the first half of the year, the domestic market demand gradually recovered, production and supply continued to increase, and the overall economic operation rebounded for the better. In June, affected by factors such as tight supply and expected reduction in new cotton production, domestic cotton prices rose rapidly in the first half of the month, reaching a new high in the middle of the month. On the 16th, China's cotton price index (CCIndex3128B) rose to 17,540 yuan/ton; after that Due to the off-season of the textile market, the inventory of finished products increased, the operating rate of enterprises decreased, and the downward transmission of cotton prices was not smooth, so there was a slight correction. The international cotton price generally fluctuated and went down, rebounded at the end of the month, and the price difference between domestic and foreign cotton continued to expand. The China Cotton Association predicts that the national cotton production in 2022 will be 6.622 million tons, a year-on-year increase of 14.7%; imports will be 1.6 million tons, a year-on-year decrease of 7.4%; cotton consumption and exports will be 7.6 million tons and 30,000 tons respectively; ending inventory It was 8.912 million tons, a year-on-year increase of 7.1%.
1. The growth of cotton in Xinjiang is not as good as in previous years
In June, cotton began to bud and bloom across the country. Due to the unfavorable weather in the early stage, cotton grew slowly in Xinjiang, and the growth was generally weak, and the development process was significantly later than in previous years. The growth of cotton in the inland area was generally good. Although there was drought in some cotton areas, it had little impact on cotton growth. According to the survey by the China Cotton Association: as of June 30, the national cotton budding rate was 98.3%, which was 0.6 percentage points higher than the same period last year
2. The domestic cotton price rose to a new annual high
In the first ten days of June, the domestic macroeconomic environment warmed up and the market expected that the supply of cotton would be tight. The futures and spot market prices continued to rise, and the demand for downstream textiles weakened in the middle and late months of the month. The support was limited, and the downward transmission of cotton prices was unfavorable. The domestic cotton spot price was under pressure. . Cotton companies were more active in sales during the month, but it was the off-season of textiles, downstream demand continued to weaken, and the willingness to replenish warehouses gradually weakened.
3. The decline in commercial inventories has slowed down
In June, the textile industry was in the traditional off-season, the operating rate of enterprises dropped slightly, and only moderate purchases were made. Domestic cotton commercial stocks continued to decline month-on-month, and the rate of decline slowed down. As of June 30, the national cotton commercial inventory was 2.8969 million tons, a decrease of 595,900 tons or 17.1% from the previous month, and a decrease of 3.7 percentage points from the previous month; 825,300 tons lower than the same period last year. The transportation volume of cotton out of Xinjiang declined again. In that month, Xinjiang's professional cotton warehouse shipped 381,900 tons out of Xinjiang, a month-on-month decrease of 135,200 tons, or 26.1%, which was higher than 198,000 tons in the same period last year.
4. textile demand weakens and finished product inventory increases
In June , textile downstream orders gradually weakened, cotton yarn prices were weak, spinning profits continued to decline, and even suffered losses. Enterprises continued to limit production and stop production, and the operating rate decreased. The demand for lint was weak, and enterprises purchased cautiously. According to the survey, yarn output decreased by 1.7% month-on-month and was still 7.4% higher than the same period last year; cloth output decreased by 2.8% month-on-month and was 2.4% higher than the same period last year. As of June 30, the cotton industrial inventory of textile enterprises in the library was 822,200 tons, a decrease of 32,200 tons from the end of last month and an increase of 243,100 tons year-on-year.
5. Cotton import volume decreased
According to data from the General Administration of Customs, my country imported 83,000 tons of cotton in June, a decrease of 23.9% month-on-month and 49% year-on-year. Among the countries of origin, the United States still ranks first, accounting for 60%. In the first half of 2023, my country imported a total of 580,000 tons of cotton, a year-on-year decrease of 49.6%; in the first 10 months of 2022/23, a total of 1.14 million tons of cotton was imported, a year-on-year decrease of 24.2%.
6. Relevant departments will organize the sale of part of the central reserve cotton
On July 18, the relevant departments issued an announcement. According to the requirements of relevant state departments, in order to better meet the cotton demand of cotton spinning enterprises, they will organize the sale of some central reserve cotton in the near future. Time: From the end of July 2023, every national statutory working day will be listed for sale; the daily listed sales volume will be arranged according to the market situation; the bottom price of listed sales will be determined according to the market dynamics, and in principle, it will be linked to the spot price of cotton at home and abroad.
7. Issuance of sliding tax quotas for cotton imports
On July 20, the National Development and Reform Commission issued an announcement. In order to ensure the needs of textile enterprises for cotton, it was decided after research that the 2023 cotton tariff quotas and preferential tariff rate import quotas (hereinafter referred to as "sliding tax quotas for cotton imports") will be issued in the near future. This time, 750,000 tons of sliding tax quotas for non-state-operated cotton imports will be issued, with no restrictions on trade methods.
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