According to USDA weekly export statistics, 2023 May 12-18 week, May 19-25 week, May 26-June 1 week China were net signing 2022/23 year U.S. land cotton 14,700 tons, 50,300 tons, 87,200 tons, respectively, accounting for the week of the total amount of U.S. land cotton contracted exports of 49.33%, 82.87%, 80%, the amount of imports , imports accounted for more than in mid-May continued to hit a new high in this year’s Chinese contracted volume.
An international cotton traders said that in late May China signed 2022/23 annual U.S. land cotton year-on-year, chained growth in the expected, but the increase is so large, the demand is so strong but some unexpected, taking into account the 2022/23 annual U.S. cotton has long been “oversold”, so the main body of the contracted sales of U.S. cotton exporters, international cotton merchants ; Some other contracts are likely to require buyers and sellers to negotiate the use of 2021/22 years of U.S. cotton, Brazilian cotton or Australian cotton instead of delivery.
Why the recent Chinese enterprises signing 2022/23 year U.S. cotton enthusiasm rebounded sharply? The industry analyzes the following points:
First, the price advantage of U.S. cotton is fully apparent. since late May, ICE cotton futures December contract fell below 80 cents / lb, 79 cents / lb, inside and outside the cotton price difference once expanded to 1,500-2,000 yuan / ton (1% tariffs), China’s cotton textile enterprises, traders are very attractive.
Second, some of the above-scale enterprises with cotton import quotas layout raw material supply in advance in 2023/24. Considering that in 2023 the country / Xinjiang region not only planted cotton area as a whole decreased by a large margin, and by the weather factors affecting the three major cotton areas in Xinjiang South Xinjiang yields are likely to decline and the probability of Xinjiang region next year to raise the price of the harvest rose sharply, so the 1% tariff quota of cotton enterprises on the far-month U.S. cotton shipment inquiries, orders increased.
Third, the continued depreciation of the renminbi worries intensified, enterprises through a variety of ways to reduce the risk of cotton imports. Part of the buyers through the negotiation with the exporter to delay shipment, deferred payment, advance receipts and prepayments, open forward letters of credit financing a variety of other ways to avoid the risk of exchange rate fluctuations; and lock the exchange rate, the choice of RMB settlement is not smooth.
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