China Cotton Market Monthly Review-March, 2018

Source:China Cotton Association  Date: 26/March/2018

~In February 2018, Influenced by the lunar New Year holiday, the domestic cotton transaction and the processing activities were weakened. The progress of inland transaction was slightly slower than the same period last year, and the price was basically stable. The operation of the textile industry is weak, and cotton mills demand was significantly decreased. Commercial inventories continued to decline at the end of February, as the volume of new cotton fell to its lowest level in the year. Domestic spot price was relatively stable and has slightly declined, the international spot price drops first and then to rise; Textile and apparel exports increased year-on-year and decreased compared with the last month.



(1) the transaction price and the progress were slightly lower than that of the previous year. By the end of February, cotton transaction progress: with transaction rate of 98.4% nationwide, 0.06 points down from previous year; The Yellow River basin was 86.99%, an increase of 1.14 points from a year ago. The Yangtze River basin was affected by adverse weather conditions, with transaction rate of 94.67%, decreased by 3.85% from the previous year. The cotton transaction in Xinjiang has been finished. As the weather has gradually recovered, farmers in southern Xinjiang have begun to prepare for the spring ploughing. This year's ploughing time is expected to be the same as in previous years. The average price of cotton is 6.14 yuan/kg, down 11.27% year on year, and 4.97% down from the previous month. The Yellow River basin is 6.48 yuan/kg, down 10% from the previous year. The Yangtze River basin was 5.73 yuan/kg, down 13.4% year on year.



(2) the spot transaction volume is light, and the commercial stock is down slightly. Influenced by the lunar New Year holiday in February, acquisition and processing enterprises closed, resulting in limited amount of new cotton into market, textile enterprises cotton consumption declined obviously, procurement is not positive, market as a whole light volume, business inventories continue to decline. According to statistics, in late February, the total amount of cotton commercial stocks was about 3.6302 million tons, a decrease of 27.98 million tons?dropped of 7.2%  compared with the previous month.



(3) domestic cotton prices are slightly lower, while the international price rises. In late February, textile enterprises resumed production, but the market was more focused on the cotton reserves. Although the cotton mills intensified efforts to sale, but the transaction volume was still light, and the price declined slightly. The international market is affected by a variety of factors, the price first falls and then rises, the average price is lower, and the cotton price difference at home and abroad is at a low level. The China Cotton Price Index (CC Index 3128B) fetched 15,685 yuan/ton, down 30 yuan/ton from the end of the previous month. The average monthly price was 15,695 yuan/ton, up 15 yuan from the previous month and 285 yuan/ton dropped from a year ago. Foreign Cotton Index (FC Index M) shows the average price is 88.43 cents per pound, up 2.83 cents/pound than previous year, by the end of the month the price of 91.25 cents/pound, 1% tariff under 14710 yuan/ton, cotton price difference at home and abroad is 975 yuan/ton.



(4) The demand for cotton is stable and the export of textile and apparel has increased significantly. A modest uptick between the global economies, the RMB continue to appreciate in textile and apparel results in less competitive in exports, but with adequate mills’ orders, the advantage of domestic cotton yarn price remains, and the cotton demand remained stable. The China Cotton Association predicts consumption of 8.43 million tons in 2017/2018, unchanged from earlier forecasts.



In February, textile and apparel exports increased significantly year-on-year, with total exports of .343 billion, an increase of 85.32% from a year earlier and drop 11.96% from the previous month. Among them, the export of textile yarn, fabrics and products was .918 billion, up 94.4% year on year and drop 10.7% from the previous month. Export apparel and clothing accessories were .425 billion, up 78.8% year on year and drop 12.9% from the previous month.



 

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China Cotton Index (CC Index)
2018-11-15
  • CCindex (3128B) : 15585 0
  • CCindex (2227B) : 14655 -5
  • CCindex (2129B) : 16187 -6
Foreign Cotton Index (FC Index)
2018-11-15
  • FC index S: 90.65 0.56
  • FC index M: 86.74 0.60
  • FC index L: 84.89 0.50
Monthly Date
  • Cotton Import 1-2018 13.4(10 thousand ton)
  • Yarn Output 9-2018 286.8(10 thousand ton)
  • Textile Export 10-2018 232.6(100 million USD)
Copyright © CHINA COTTON ASSOCIATION 2008