Depth Analysis Of Cotton Market Trend In 2016

Since January 2016,

The situation in the downstream market is not good enough. Not only the orders for textile enterprises have been decreasing, but also affected by the factors of the Spring Festival holiday, the procurement of raw materials has basically stagnated.

At this point, the upstream cotton processing enterprises are deeply trapped in sales difficulties, and selling cotton is hardly a common problem in the industry. Especially in 2016, the cotton enterprises were on pins and needles under the anticipation of the national cotton mill.

Can domestic cotton market improve in 2016?

Judging from the global supply and demand, according to the latest report of the International Cotton Advisory Committee (ICAC), the world cotton output in 2015 is estimated to be 22 million 890 thousand tons and consumption is 24 million 330 thousand tons, which is in a tight balance as a whole.

From domestic supply and demand data, domestic cotton end inventory will reach 13 million 50 thousand tons in 2015, and supply and demand will be seriously unbalanced.

Because domestic cotton import tariff quotas remain at 894 thousand tons in 2016, domestic cotton market is unlikely to be affected by foreign markets.

In addition, domestic downstream demand is shrinking.

As China's largest textile exporter in the world, its export situation is also not optimistic. In 2015, China

Export volume showed a year-on-year decline, which had to worry about its export situation in 2016.

As shown below, in 2014, the export volume of textiles and clothing reached a historical peak in China, and began to decline in 2015.

Affected by lower demand and weaker exports, domestic cotton imports in 2015 were almost cut.

According to China Customs data, 1 million 473 thousand tons of cotton were imported in 2015, a decrease of 970 thousand tons compared with that of the previous year, with a reduction of 39.8%, of which textile exports and clothing exports both declined.

In addition, cotton production in Vietnam, Bangladesh and Indonesia has been increasing in recent years, and has stimulated cotton imports. In 2015, Bangladesh is likely to overtake China as the largest cotton importer for the first time, while Vietnam will be the third largest cotton importer.

Cotton imports in India and Pakistan will also increase in 2015, which will undoubtedly cause great pressure on the domestic textile industry.

On the other hand, the domestic cotton market is facing great challenges in 2016. It is difficult to improve domestic cotton sales and low prices.

According to the national cotton market monitoring system survey data, in 2015, the total output of cotton in China was 5 million 216 thousand tons, a decrease of 21.2% over the same period last year.

Of course, the supply of cotton plus about 10000000 tons of national cotton stocks.

In the near future, a hot topic in the market is when the national cotton reserves will go out.

2016

The background is "going out of stock, capacity and deleveraging". In 2016, the national cotton mill came out on the spot. The market is not expected to be too high, at least to maintain the current level of 12000-13000 yuan / ton, and even some enterprises believe that the price of the national cotton mill should be 10000 yuan / ton and below.

In addition, one problem may be overlooked, that is, in 2015, cotton production in the whole country not only decreased but also decreased in quality.

A Xinjiang textile enterprise official said that in 2015, the quality of Xinjiang cotton (including the mainland cotton) decreased mainly due to shorter fiber and thicker fiber and increased horse value. This is a common phenomenon.

In previous years, the quality cotton above 3128B level in Xinjiang and the mainland accounted for more than 85%, and in 2015 less than 60%, almost no 3129, 2129, 1129 of these high quality cotton.

Generally speaking, 3128 grade lint is suitable for spinning 32 or 40 regular yarn. If spinning more than 50 high count yarn, cotton with better quality is needed for cotton blending. It is also difficult to find cotton suitable for spinning high count yarn from national storage cotton.

Therefore, from the perspective of supply, China's high quality cotton is tight in 2016, while low quality cotton is oversupplied.

From this point of view, in 2016, domestic cotton prices will appear "ice and fire two days" situation, high and low quality cotton price difference may continue to widen.