Economic Growth Slows Down Demand For Cotton In Spinning Mills

In recent months, the international cotton price has risen slightly, and the price of cotton in India has been stable. ICE futures rose from 62 cents to 64 cents, and the A index increased from 72 cents to 75 cents. Cotton prices in China rose by about 400 yuan, reaching 13000 yuan / ton. Cotton prices in India (S-6) were stable at 74 cents, while cotton prices in Pakistan rose from 68 cents to 73 cents.

USDA's latest forecast shows that the world's cotton production has been cut by 2 million 800 thousand packages, the consumption volume has been reduced by 116 thousand packages, and the final inventory has dropped by 2 million 900 thousand packages, to 80 million 800 thousand packages, which is basically the same as the first three years (8030-8090 pack). In terms of output, the output of most major producers in Pakistan, China, India, Turkey, Turkmenistan and Greece fell sharply. In terms of consumption, India increased by 250 thousand packages, Indonesia increased by 100 thousand packages, Turkey increased by 200 thousand packages, and Uzbekistan increased by 100 thousand packages. The global export volume has increased by 1 million 100 thousand packages, Brazil has reduced 300 thousand packages, and Benin, Greece and India's exports have increased by 100 thousand packages. Imports from Turkey, Pakistan and India increased and Indonesia's imports decreased.

The Sino US trade dispute is still the biggest uncertainty in the market. Although the two sides are working hard in the direction of the preliminary agreement, the details are not known. After the cancellation of the APEC summit in Chile, the date of the signing of the agreement is beyond discussion, and it is expected that it will wait until at least December. According to official statistics, China has signed 320 thousand tons of cotton and cotton. China hopes that the two countries will cancel all tariffs added, but the idea of the United States is to gradually abolish tariffs. Any reduction in tariffs will be a marked reversal.

In September, the United States imposed 15% tariffs on Chinese clothing, covering less than 75% of China's apparel imports in the United States. In that month, the clothing imported from the United States dropped by 13% in square meters compared with the same period last year, but China's share is still very high (45%). Over the past three months, the sum of Chinese clothing imports has increased slightly by 1% over the same period last year (from July to September). In 7-9 months, China's share remained stable (47%) compared with the same period last year. Whether the decrease in clothing imports from China in September means that American retailers are away from China remains to be seen. The demand for fiber in China's textile mills is likely to slow as a result of US tariffs.

The International Monetary Fund (IMF) estimates that Sino US trade disputes will lead to a 0.8 percentage point decline in global GDP growth in 2020. The growth of global GDP is closely related to the growth of global textile cotton consumption, and the current downturn is accompanied by weak demand from spinning mills.