Market Observation: CAI Releases Cotton Export Data, And Indian Cotton Hanging Orders Increase Significantly

According to feedback from cotton trade enterprises in Qingdao, Zhangjiagang, Guangzhou and other places, since January, not only have Indian cotton bills and quotations for shipping dates increased significantly in February and March (including a small amount of machine-made cotton, cotton in 2023/24), but also Indian cotton for port customs clearance has gradually increased, and some international cotton merchants, trade enterprises, and textile enterprises are increasingly concerned about Indian cotton.

A cotton enterprise in Zhejiang said that due to the long rainfall period from October to November 2023 in Gubang, the color level and quality indicators of S-6 will be greatly affected, and the matching degree with the demand of domestic cotton enterprises will be reduced. Therefore, most of the Indian cotton arriving at the port and shipped recently will be produced in the northern cotton region, Mabang, and a small number of southern cotton regions.

From the quotation of some traders, the net weight quotation of Indian cotton M1-5/32 (Qiangli 29GPT) for shipment in February and March from March 4-6 is concentrated at 97.58-99.20 cents/pound (due to differences in specific indicators and grades, the lower Gubang S-6 quotation is 93.5-94 cents/pound), and the direct import cost under 1% tariff is about 17020-17300 yuan/ton; At the current port, the net weight picking price of India M1-5/32 (Qiangli 29/30GPT) is 16825-17000 yuan/ton, and the two are 200-400 yuan/ton upside down; In the past two days, the mainland's Ku Xinjiang cotton 3129B (or Li 28/29) machine picked cotton quoted 17000-17250 yuan/ton. Considering the difference in net weight and public weight settlement, the cost of imported Indian cotton under 1% tariff is less than 500 yuan/ton or even flat, and the price competitiveness of Indian cotton is not strong.

According to the latest report of the American Agricultural Counsellor, India's cotton export volume in 2023/24 will reach 435000 tons, and the forecast data in the CAI balance sheet is only 238000 tons, with a difference of 197000 tons. Some Indian cotton exporters judged that due to the significant increase in ICE cotton and the relatively weak increase in FOB and CNF of Indian cotton, the inquiry and purchase of Indian cotton in 2023/24 by cotton mills and traders in China, Vietnam, Indonesia, Bangladesh and other countries showed signs of continuous warming. Therefore, the annual cotton export data released by CAI may be conservative, with 300000 to 400000 tons or a reasonable range.