Textile enterprises are at a deadlock in purchasing raw materials, and the price difference between domestic and foreign cotton continues to be flat

[168TEX News] In recent years, the price difference between domestic and foreign cotton has been plaguing textile companies. Due to the price advantage of imported cotton, the proportion of domestic cotton used has been significantly reduced, and the competitiveness of the domestic cotton industry chain in the international market has become increasingly weakened. However, as the country withdrew from the “purchase and storage” market support policy in 2014, in order to protect farmers’ income and stabilize the planting area, a direct subsidy of 19,800 yuan/ton “target price” price difference was implemented. Regarding the situation, domestic and foreign cotton prices will gradually move closer until there is a seamless “integration”. Perception dominates. Recently, domestic cotton spot prices have stopped falling and stabilized, and textile companies’ raw material replenishment has been tepid, which has not stimulated textile companies’ purchasing enthusiasm, and actual transactions have been few. At present, downstream yarn companies are limited by financial problems and it is difficult to stimulate demand for raw materials. They are still cautious in purchasing and insist on buying as they are used. At present, the price advantage of imported cotton is gradually lost as the domestic cotton spot falls to a low level. Under future policy tightening, the prospects for foreign cotton sales are bleak. After investigation, the author conducted a preliminary analysis on the current price difference between domestic and foreign cotton and the cotton demand of textile enterprises, in order to understand the current cotton situation.
Cotton imports fell for six consecutive months in February compared with the same period last year


In February, affected by the Spring Festival, cotton purchases by textile companies were relatively light. my country’s cotton import quantity and average price were relatively stable month-on-month, but continued to decline year-on-year.
According to customs statistics, my country imported 159,100 tons of cotton in February 2015, a decrease of 2,100 tons, or 1.3%, from the previous month, and a year-on-year decrease of 35.3%; the average import price was US$1,698/ton, an increase of US$23, or 1.4%, from January. %, down 15.4% year-on-year. In the first six months of 2014/15, a total of 881,700 tons were imported, a year-on-year decrease of 47%. In the first two months of 2015, a total of 320,300 tons were imported, a year-on-year decrease of 40.5%.
The price difference between domestic and foreign cotton continues to remain low recently

As of March 27, 2015, the domestic CCI328B index reached 13,473 yuan/ton. The CCI328B index was 2,485 yuan/ton higher than the international Cotlook A discount delivery price A index of 1% tariff of 10,988 yuan/ton, and lower than the sliding tax of 13,552 yuan/ton. 79 yuan/ton, the Zheng cotton indicator contract 1505 (13210) is 342 yuan/ton less than the international Cotlook A discount delivery price A index sliding tax, and the price difference between domestic and foreign cotton prices in the spot market continues to fall compared with last month. However, domestic cotton consumption is currently shrinking, textiles and clothing lack competitiveness in the international market, export orders continue to be lost, and consumption continues to shrink. International cotton prices will not be able to provide any support for Chinese cotton prices in the near future.
Foreign cotton stops falling and rebounds, stocks rise
Recently, foreign cotton prices have risen with the rebound of ICE cotton futures, and imported cotton port inventories have gradually increased. However, the increase in foreign cotton has not caused the increase in mainland lint cotton quotations. Quotations in the mainland market are divergent, with prices rising and falling. The price of lint cotton has dropped in many areas. The main reasons are: first, the futures market continues to fall; second, the Xinjiang Corps lowered the purchase price of machine-picked cotton, resulting in a slight decline in real estate cotton prices; third, most textile companies have recently begun to replenish their stocks, but there are few new orders. , enterprises still purchase sporadicly, which puts certain pressure on real estate cotton.
Calculated based on 1% tariff and sliding tax, the RMB discounted prices are 11,072 yuan/ton and 13,591 yuan/ton respectively. Compared with the China cotton price index 3128B cotton on that day, the price difference between domestic cotton price and imported cotton is 2,376 yuan/ton respectively. and -143 yuan/ton. Under the sliding tax, the price of foreign cotton continues to exceed that of domestic cotton.
The author believes that the current mentality of manufacturers is pessimistic and their willingness to ship is strong. In addition, downstream yarn companies are limited by financial constraints, the price of imported cotton yarn remains weak, and corporate product inventories are high. The demand for raw materials is difficult to stimulate. They are still cautious in purchasing and insist on following the trend. Buy as you go. At the end of March, cotton companies are under great pressure to repay loans, and short-term supply and demand pressures still exist. In the future, as the market gradually recovers, spinning companies may usher in a small wave of stocking in April and May, but the price difference between domestic and foreign cotton will still remain in a low range. . On the other hand, the existence of huge national cotton reserves and import quota restrictions will have little impact on domestic cotton spot prices in the future, even if the price difference between domestic and foreign cotton has converged.