Brazil Cotton Imports Growth Is Difficult "Plain Sailing"

According to customs statistics, China's cotton imports in September were 83 thousand tons, down 9.3% from the previous month, representing a 35.7% decline compared with the previous year. Among them, Australia cotton, American cotton and Brazil cotton still rank the top three cotton imports in China. Compared to August, the number of imported Australian cotton in September was 41 thousand tons, an increase of about 7 thousand tons. It basically occupied half of the total cotton imports in September, while the number of imported cotton and Brazil cotton declined.

It is worth noting that the volume of general trade imports in September was 25 thousand tons, which accounted for only 30.12% of the total import volume of the month, but still increased by 2 thousand tons compared with August. The proportion increased by 5.5%. However, from the prices quoted by ports such as Qingdao, Zhangjiagang and Shanghai, the SM 1-5/32 Australian cotton net weight pick up price was maintained at 15500-15600 yuan / ton, while the quotations for bonded, spot SM 1-5/32 and M 1-5/32 reached 84.3-84.5 cents / pounds, 83.70-83.90 cents / pounds respectively, both RMB and US dollar quotations were significantly higher than those of Brazil cotton, India cotton, West African cotton and American cotton.

From the feedback of foreign businessmen, importers and textile mills in October, Brazil cotton, which was highly regarded by the Brazil government and exporters, although its overall export performance was strong (in October, Brazil's cotton exports reached 273400 tons, an increase of 68% over the same period last year, a record high), but the number of contracts, shipments and exports to China failed to meet expectations. Some agencies and cotton makers judged that the import cotton sorting in October would still be Australian cotton, American cotton, Brazil cotton, Brazil cotton short term "superior", and some difficulties in achieving "overtaking" in the US cotton and cotton cotton "bend".

Why is Brazil's import performance less than expected? The author analyzes the following points (not discussing Brazil cotton shipments, transportation, warehousing and other issues): first, Brazil cotton prices are relatively strong, and India cotton, West Africa cotton, Ukrainian cotton, cotton and other competitive advantages are not big or even at a disadvantage. From the quotations provided by Pakistani exporters and international cotton traders, SM's 1 1/8 and 31-337 CNF quotations are respectively 75.60-75.90 cents / pounds, 78.20-78.40 cents / pounds (12/1 month shipping date), while EMOT/MOT SM 1-5/32 quotations are only 75.50-76 cents / pounds (12/1 month shipping period, 12/1); two, the traders are still selling Brazil cotton in the year of the first year, and the new cotton market is not large. Up to now, Qingdao, Zhangjiagang and other places traders low grade, low quality Brazil Chen cotton stock is still relatively large, capital pressure is prominent, is not conducive to the new cotton business in 2019/20; in order to reduce the impact on the sale of Chen cotton, traders to slow down the launch of high quality new cotton; three, traders and textile factories have strong expectations for signing the first stage trade agreement between China and the United States in the month of 11/12, and expect to sign up for the "2019/20" higher price 2019/20 year after the abolition of the tariffs. The four is that China's cotton consumption stabilization and rebound need to "change the space with time", plus Xinjiang cotton, West African cotton, uwu cotton and so on.