According to the feedback of cotton trading enterprises in Qingdao, Zhangjiagang, Shanghai and other places, although with the rise of ice and Zhengzhou cotton, several international cotton merchants and importers have lowered the basis deviation of shipping cotton, bonded cotton and customs clearance cotton (customs clearance cotton: CF2009 + basis), but the inquiry and shipment situation has not improved much, especially the medium and high-quality Brazilian cotton and Indian cotton.

According to the survey, up to now, about 150000 tons of old cotton in 2019 have not been sold in Brazilian farmers’ hands; and some stocks are also in the hands of traders and export enterprises; in addition, the continuous depreciation of real against the US dollar and the outbreak of Brazil’s new crown disease have led to a sharp decline in domestic cotton consumption. Therefore, with the countdown of new cotton listing in 2020, the basis of Brazil cotton has been fully opened and the basis has been lowered In addition, the greater the rise of ice, the greater the reduction of Brazilian cotton basis. On July 5 and 6, the basis of M 1-1 / 8 and SM 1-5 / 32 were 8.25-9.25 cents / pound and 9.5-10.5 cents / pound, respectively, which was 3-4 cents / pound lower than that of Brazil cotton in mid June.

There are four main reasons for India’s cotton price to decline under pressure: first, the Indian epidemic situation is “uncontrollable”, and the domestic cotton consumption is still continuing; second, CCI inventory exceeds 10 million bales (another saying is nearly 2 million tons), considering that it is still necessary to purchase at MSP price in 2020 / 21, cotton textile mills and exporters still do not buy the price despite the repeated reduction of sales price; third, the southwest monsoon is not only responsible for this problem India’s farmers were enthusiastic about planting cotton. As of the end of June, India’s cotton planting area had increased by 165% year-on-year, and the prospect of cotton production was optimistic. Fourthly, China’s textile enterprises and traders were very cautious about signing contracts to purchase Indian cotton due to the border conflict between China and India.

Why did Brazilian cotton and Indian cotton trade get cold again? The author’s views are summarized as follows: first, since July 1, the central reserve cotton wheel has effectively replenished the domestic supply of medium and low quality cotton, and some low grade and low index Indian cotton and Brazilian cotton have been squeezed; second, since the middle of April, China has signed a large number of contracts to import American cotton in 2019 / 20 and 2020 / 21, with large arrival and delivery volume in July / 8 / September, and cotton enterprises choose machines Third, China’s requirements on inspection and Quarantine of Brazilian cotton and Indian cotton from epidemic areas are becoming more and more strict; fourth, as domestic sales orders enter the off-season in July and August, the consumption demand of OE yarn, 21s and below cotton yarn is declining (the proportion of cotton mills and cloth mills with joint production restriction and production reduction is relatively high), and the procurement of low and medium quality cotton decreases.