So, what will happen if India's largest cotton exporter stops exporting to China?
Indian Cotton Association:
The price of domestic cotton is excellent, and it is easy to find a market substitute.
As one of the largest cotton importers in the world, China is the largest buyer of Indian cotton, importing more than 200,000 tons of cotton every year. Specific data show that up to this year, India has delivered 600,000-700,000 bales of cotton (about 170kg/ bale) to China, of which 75% are in transit. Originally, Indian exporters also predicted that they would continue to ship 300,000 packages before the end of February this year, but from the current situation, this export target may be difficult to achieve.
However, the Indian Cotton Association (CAI) believes that the epidemic in China will not have a serious impact on Indian cotton exports. Indian cotton is cheap, so it is not difficult to find other buyers. So far this year, India has exported 2 million bales of cotton, which may reach 3.5 million bales by the end of March.
It is understood that Indian cotton is indeed the cheapest cotton in the global market at present, with the price of 75 cents/pound in China and Viet Nam and 76 cents/pound in Bangladesh. The rise of ICE futures has little effect on Indian cotton prices, and it is basically a pricing transaction rather than a basis transaction. In addition, Indian Rupee's falling exchange rate has also helped Indian cotton exports. It is estimated that at least 500,000 bales will be signed during the delivery period of 1~2 this year, and most of them are S-6, so the supply of high-grade cotton in India will be tight in the third quarter.
China investment institutions:
North American cotton can be replaced, and India will lose big buyers.
India's largest cotton exporter stopped exporting to China. Some domestic investment institutions believe that India may face the problem of losing a big buyer. After all, it is an indisputable fact that India's cotton output is high this year and the inventory pressure is high.
According to the prediction of the Indian Cotton Association, India's cotton output in 20 19/2020 is 35.45 million bales, much higher than the previous year's 3120,000 bales, and its export volume is 4.2 million bales. From June 20 19 to June 2020, the total cotton supply in India was 23.489 million bales, including new cotton19.289 million bales, and the import volume was10,000 bales. The initial inventory was raised from 2.35 million bales to 3.2 million bales, consuming 65.439 million bales. Based on the comprehensive data, India's cotton production is estimated to be the highest in the past three years, and the inventory pressure is relatively high.
The insiders believe that due to the domestic epidemic, the time for domestic cotton spinning enterprises to resume work is delayed, and the short-term demand for domestic cotton is limited. Even in the face of supply and demand gap, China, a big cotton importer, can purchase more cotton from North America if it does not purchase Indian cotton. Coupled with the first Sino-US trade agreement signed in June 5438 +65438 10+May 2020, China may increase the import of American cotton.
American investment institutions:
It is favorable to the price of American cotton, and the demand remains to be seen.
American investment institutions believe that if China does not purchase Indian cotton, it will purchase more American cotton, which is beneficial to the price of American cotton. However, China's demand for American cotton is still unknown, and ICE futures have rebounded a lot. It may not be appropriate to expand the purchase now. At present, the price of cotton in India is around 765,438+0 cents/pound, while that in the United States is 65,438+05% higher.
People in the domestic industry believe that the total cotton output in Xinjiang will be the same as that in the previous year in 20 19/2020, but the quality and grade can't fully meet the demand, and the national cotton storage and storage stocks have fallen to the warning line, and the cotton quality can't meet the spinning needs. The phenomenon of high cotton import in China will continue in 20 19/2020.
With the signing of the first-stage trade agreement between China and the United States, global cotton consumption will gradually pick up, and China may increase its cotton imports from the United States, thus reducing the number of cotton imports from Brazil and India. It is estimated that the total cotton import of China will exceed 2 million tons in 2020.
Besides closing the cotton market to China, India even took measures to "restrict" the export of medical supplies. 65438+1October 3 1 day, official website, India's General Administration of Foreign Trade issued a notice prohibiting India from exporting personal protective equipment such as masks and protective clothing during the pneumonia epidemic. However, the Indian government did not give the reason for the ban.
Source: China Textile News.
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