Judging from the quotation resources of some international cotton merchants and traders, not only are there very few Indian cottons in 2022/23 with shipping schedules in October/November/December (including S-6, MECH, J34, etc.), but also Indian cotton in 2023/24 There are almost no cargoes and no quotations. As of now, Qingdao Port still has a small amount of 2022/23 customs-cleared cotton for sale (M 1-5/32 strong 29/30/31GPT), but compared with the Brazilian cotton spot M 1-5 The price difference of /32 is only 400-500 yuan/ton, and the competitiveness is also somewhat insufficient. Cotton companies in Zhangjiagang, Nantong, Nanjing and other places have reported that spot bonded and customs cleared Indian cotton at ports is very scarce, and cotton textile mills and middlemen have very low enthusiasm for inquiry/order placement.
The lackluster external offer of Indian cotton may be related to the following factors:
First, India’s cotton production in 2023/24 has dropped significantly year-on-year, and processing companies and relevant departments are worried about insufficient domestic cotton supply. The Cotton Association of India (CAI) released for the first time India’s cotton production forecast for 2023/24 at 5.017 million tons, a decrease of 404,000 tons or 7.5% from the previous year’s 5.421 million tons, the lowest level in 15 years.
Second, CCI’s acquisition volume has increased significantly this year, and the liquidity of lint has weakened. According to data released by CCI, as of early November, the market volume of lint cotton was 2.88 million bales (about 480,000 tons, mainly resources from the northern cotton area and central cotton area), while the cumulative market volume announced by AGM was 930,000 tons. In theory, CCI The purchase volume may account for 20-30% of the Indian cotton market; the main reason is that the difference between the current market price of seed cotton and the MSP purchase price has narrowed significantly compared with the previous two years, and private ginners have heavier water and miscellaneous deductions.
Third, since the end of October, the ICE December contract has continuously exceeded 85 cents/pound, 80 cents/pound, and 75 cents/pound. However, the decline in domestic cotton prices in India is significantly weaker than that of ICE. Therefore, the November/December/January shipping schedule The FOB/CNF quotation of Indian cotton is obviously less competitive than that of Brazilian cotton. From November 14th to 15th, the 29GPT fixed price of Indian cotton S-6 1-5/32 29GPT in the main port of China for the November/December shipping date was concentrated at 89-92 cents/pound, while the Brazilian cotton M 1-5/32 for the same shipping date The quotation is only 89.70-92.50 cents/pound. Obviously, Indian cotton lacks cost-effectiveness.
Fourth, with the low cost performance of Indian cotton, low exports and the decline in the credibility of some Indian cotton exporters in recent years, coupled with factors such as declining consumer demand for imported cotton and improved quality indicators, Chinese buyers are paying more attention to Indian cotton. The price continues to decline, and some textile companies in Shandong, Jiangsu, Henan and other places have removed Indian cotton from their purchase lists. Therefore, it is not difficult to understand that international cotton merchants and traders have reduced their use of Indian cotton.
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