Quote Today: Look At The Trend Of Domestic Cotton Price After The Launch Of The Reserve Cotton Wheel

This week, domestic cotton prices rose, while international cotton prices rose and fell; The price of cotton yarn at home and abroad rose, and the price of foreign yarn rose relatively large; Domestic polyester staple fiber prices recovered.

　 1、 Domestic cotton price rises

This week, the meeting of the Political Bureau of the Central Committee of the Communist Party of China (CPC) released a positive signal of "expanding consumption". The overall strength of the stock and commodity markets was driven by the sharp rise of ICE cotton from Monday to Thursday. The domestic cotton price followed the rise. On July 24-28, 2023, the average settlement price of the main contract of Zhengzhou cotton futures will be 17184 yuan/ton, up 66 yuan/ton from the previous week, or 0.4%; The national cotton price B index, which represents the market price of standard lint in the mainland, averaged 17911 yuan/ton, up 161 yuan/ton or 0.9% from the previous week.

　 2、 International cotton prices rise and fall

This week, the dry weather in Texas, the United States, triggered a rapid rise in ICE cotton, but then affected by the sharp decline in the contracted volume of American cotton announced on Thursday night, ICE cotton fell sharply, with the average price higher than the previous week. On July 24-28, 2023, the average settlement price of the main contract of cotton futures in New York was 86.14 cents/pound, up 3.73 cents/pound or 4.5% from the previous week; The international cotton index (M), representing the average landed price of imported cotton in China's main ports, averaged 98.25 cents/pound, up 2.95 cents/pound or 3.1% from the previous week; Converted into RMB, the import cost is 17121 yuan/ton (calculated by 1% tariff, excluding port miscellaneous and freight), up 515 yuan/ton or 3.1% from the previous week. The domestic cotton price is 722 yuan/ton higher than the international cotton price, and the price difference is 422 yuan/ton smaller than the previous week.

　　 3、 The price of cotton yarn at home and abroad rose, and the price of foreign yarn rose significantly

This week, the purchase and sale of textile market is still not active enough. Enterprises mainly make orders in the early stage of processing. With the further increase of cotton cost, the price of domestic cotton yarn has risen slightly. The weak situation of the outer yarn market has not improved, and the price rebounds with the raw materials. The domestic grey cloth market has been differentiated. In some regions, some conventional varieties began to be sold in small quantities. The price of cotton cloth is mainly stable. Polyester staple fiber prices recovered.

　 4、 Future prospects

The weather in the United States is hyped to cool down, and the international cotton price is adjusted in shock. On July 26, 2023, the Federal Reserve further raised interest rates by 25 basis points. The chairman of the Federal Reserve said that the economy still needs to slow down, and the labor market still needs to be weak, so that the inflation rate can "credibly" return to the Federal Reserve's 2% target. In terms of cotton market, the emergence of American cotton buds has been greatly accelerated, and the proportion of good seedlings has increased slightly. As of July 23, 2023, the budding rate of American cotton is 78%, 14 percentage points higher than the previous week, and 1 percentage point lower than the same period last year; The percentage of American cotton growing well accounted for 41%, 1 percentage point higher than the previous week and 12 percentage points higher than the same period last year.

It is reported that the high temperature weather in the United States will last at least until the first ten days of August, and the growth of American cotton in the later period still needs attention. In terms of the textile market, the Indian textile agency warned that under the slowdown of global clothing market demand, India's spinning and weaving industry has about 30% excess capacity, and many textile mills, especially small and medium-sized enterprises, may face financial pressure. It is reported that Vietnam's textile and clothing exports will decline by 17.6% in 2023. In the short term, the international market consumption is still weak, the weather speculation has cooled, and it is expected that the international cotton price will be adjusted in the current position.

The domestic cotton market policy of "combination boxing" has been implemented, focusing on the transaction of reserve cotton next week. On July 24, the meeting of the Political Bureau of the Central Committee pointed out that "we should actively expand domestic demand, give play to the basic role of consumption in stimulating economic growth, expand consumption by increasing residents' income, and drive effective supply through terminal demand" to send a positive signal to the market.

In the cotton market, Xinjiang cotton is basically growing well. The time of large-scale picking is generally expected to be postponed, and some enterprises start pre-sales of new cotton. The survey report on China's cotton growth released by the National Cotton Monitoring System shows that 62.7% of the interviewed farmers in Xinjiang are expected to delay in picking, 85.5% of the farmers report that the weather is good and average this year, and 90.5% of the farmers report that the disaster has occurred or not occurred. Recently, the central reserve cotton rotation and additional cotton import sliding tax quota policies have been announced, which eased textile mills' concerns about cotton supply.

Considering that the textile market is approaching the "golden nine and silver ten", some textile mills plan to replenish the stock, and the grey cloth market has also improved slightly in the near future. In the short term, the market sentiment is slightly positive. The transaction situation after the launch of the reserve cotton round next week will point out the direction for the domestic cotton price trend.