Cotton Yarn Imports Or Become The Next Market Hot Spot

Market rumors that China will restrict the issuance of quotas for imported cotton, except for the 894 thousand tons quota stipulated by WTO, the processing trade and sliding tax quota may no longer be issued. That is to say, even if the main contract of ICE falls below the support level of 60, 58 and even 55, the cotton price in the international market will be significantly lower than that in the domestic market. The maximum import volume of Chinese enterprises is still limited to 894 thousand tons, and there is no other way or way to reduce the cost of spinning.

Some institutions and foreign businessmen believe that with the one-time issuance of 894 thousand tons of tariff import quotas at the end of 2014, China's cotton market will basically achieve "internal circulation", and the interaction and links with the international cotton market will be greatly weakened. Because the main body of the 894 thousand ton quota is large and medium-sized cotton textile enterprises and several large cotton traders, in 2015, a large number of Cotton Traders and small and medium cotton textile mills will be "delisted" or eliminated, and the "bonus" of quotas will still exist, but the scope will be narrowed.

The author believes that in 2015, more cotton trade enterprises will turn to cotton yarn imports, cotton cloth imports and even fabrics and clothing imports, because the "quota" will cause more cotton enterprises to "fear" for imported cotton, and temporary countries such as downstream gauze have no time to import "sets", and do not rule out the 2015 "cotton blowout" imports showing a "blowout" market again. The national C40S and below count cotton yarn is forced to "corner" or even give up its position by the outer yarn.

The reasons are summarized as follows:

1. Although the "target price" subsidy in Xinjiang cotton region has gradually reduced the difference between domestic and foreign cotton prices in 2014, the expectations of the close and even merged counterparts have increased significantly. However, judging from the policy, cost and downstream digestion capability, the domestic and foreign cotton mills in 2015 are "bogus" in the same line.

The electronic matching of Zhengzhou futures and commodity cotton has been regarded as the weathervane of cotton price. CF1501 has fallen below 13000 yuan recently.

The quotations for EMOT SM 1 1/8 and EMOT M 1-1/8 for 1-3 months are 77.30-77.50 cents / lbs, 73.20-73.50 cents / lbs, 1% customs clearance cost is about 12100-12200 yuan / ton, 11500-11600 yuan / ton, and the difference between US cotton spot and Zhengzhou CF1501 contract is about 1500 yuan / ton.

At present, some cotton enterprises in January Xinjiang cotton delivery price in the mainland is 14300-14500 yuan / ton, and the difference between the United States and cotton under the 1% tariff is as high as nearly 3000 yuan / ton, which is also the main reason for some textile enterprises and futures institutions that the spot price of 3128 in the first half of 2015 will fall to 12000 yuan / ton.

But the CIF price is not much lower than the FOB price, which is much lower than the factory price of the American and India ginning mills. As we all know, generally speaking, the profit of American cotton international cotton trader is 7-10 cents / pound, while the profit of India cotton is also 5-8 cents / pound. The cost of raw materials of Chinese textile enterprises is equal or slightly lower than that of India, Pakistan and Central Asian countries in 2015.

"Merging" is just a beautiful vision.

Two, the quality of cotton yarn below C40S in India, Pakistan, Uzbekistan, Vietnam and Indonesia has reached and surpassed most of China's small and medium-sized enterprises, and combed yarn and high quality yarn have gradually occupied a place in the Chinese market. Compact spinning, siro spinning and other new spinning technology and product proportion are even higher than those of Chinese enterprises.

Since Southeast Asia, Central Asia and Turkey, Bangladesh and other countries spinning equipment concentrated in 1990-2010 years, production automation and modernization is higher than China's textile equipment in seven and 80s.

2013、2014年很多机构组织中国棉纺织企业、棉花企业、服装企业等赴印度、越南、巴基斯坦等国纱厂参观，一个共同的感受是设备先进化程度令人咂舌，完全可以媲美国内大部分棉纺厂，只是因工人熟练程度不够，纺纱配棉水平不高以及下游印染、服装等产业链不完善等等缺陷而无法在国际市场与中国产品“一较高下”，但随着近两年印度、越南、印尼等国家纺厂大量采购、使用高等级美棉、西非棉以及中亚乌兹别克斯坦棉，配棉等级和水平得到长足进步，从近两年全国各地纱线展、面料展、新型纤维展上印度、巴基斯坦等纱厂、出口商占据“半壁江山”来看，中国市场低支纱市场已全面“沦陷”，一些布厂和进口商反映，印巴等产地棉纱存在强力好、易染色及供货快等特点。

According to customs statistics, in 2012, foreign yarn imports reached 1 million 520 thousand tons, an increase of 69.01% over the same period last year, and the import of foreign yarn increased to 2 million 100 thousand tons in 2013. The increase was further expanded. In 2014, the total import volume will still exceed 2 million tons; in 2015, because of the significant reduction in the quantity of cotton import quotas, imports of cotton yarn and cotton cloth became the first choice for most traders and middlemen.

Some of the Council of China Cotton Association

And even pessimistic individuals believe that the market share of yarn less than C50S after China will be monopolized by Southeast Asian countries such as India and Pakistan after 2014. The competitiveness and advantages of Chinese textile products and quality will be reflected in combed and combed yarn of C60S or even more than C70S.

Three, as the quota has been greatly compressed for two consecutive years, most of the foreign cotton will not be willing to abandon the Chinese cotton import market. Therefore, the "moving" to India, Pakistan and even Vietnam, Indonesia and other countries will be more likely to have a short pition, and the large and medium-sized foreign merchants will also be fighting the idea of importing cotton yarn, especially India cotton merchants and exporters.

According to the survey, cotton traders and traders including a large India cotton trader have recently sold cotton yarn from India, the United States, Uzbekistan, Mexico, Turkey and other places, and even African air spinning has come to "join the bustle". Therefore, cotton and cotton yarn "shoulder to shoulder" will be the development direction of the international cotton traders.

As China's cotton yarn imports increase year by year, the purchase, pportation, insurance and other costs of the yarn will be greatly reduced. The competitive advantage of the yarn will not only be reflected in the price, but also in the aspects of quality, after sale inspection, arbitration and convenient claim, which will compete with the Chinese cotton mill.

According to statistics, in August 2014, the amount of registered cotton yarn exported to India was 96 thousand and 500 tons, a decrease of 7.99% compared with the same period last year, a decrease of 2.3% compared to the same period. In the 2014/15 fiscal year, India registered 468 thousand and 700 tons of exported cotton yarn and decreased by 20.97% compared with the same period last year. China's cloth factories and traders shifted their focus to other Southeast Asian countries, Central Asia, Mexico, Turkey and other countries, leading to a sharp decline in the import of India cotton yarn.