Environmental Uncertainty At Home And Abroad Has A Negative Impact On Textile And Clothing Consumption, Which Has A Negative Impact On Cotton Prices

 

At this stage, the geopolitical tension in Russia and Ukraine is intensifying, the downward pressure of global economy is not reduced, the domestic epidemic situation is grim, and the pressure of prevention and control continues to increase, which has a negative impact on textile and clothing consumption.

At present, the cotton supply side is in a relatively loose pattern. The cotton sales progress is slow. Most of the unsold resources are concentrated in the hands of the upstream cotton enterprises. There are about three months to go before the double zero settlement. With the passage of time, the repayment pressure of enterprises will increase, or there is the possibility of selling goods. From the current situation of the downstream, due to the transportation obstruction in many places, the freight flow further slowed down.

Cotton textile enterprises generally operating rate less than 70%, yarn products inventory more than a month or so. Most of the pure cotton yarn products are in the state of loss, especially for the low and medium count yarn, and the downstream customers are not willing to purchase. Weak fundamentals drag down cotton prices to a certain extent.

However, the overall performance of the international cotton price is stronger than that of Zhengzhou cotton, which plays a certain supporting role in the domestic cotton price. Therefore, for the upstream cotton processing enterprises, it is appropriate to carefully calculate the spot cost and actively participate in the amplification of the hedging ratio.