Monthly Report: The National Cotton Harvest Accelerated, Textile Market continued to be Active (Oct. 2020)

Source:China Cotton Association  Date: 20/November/2020

In October, the national cotton picking peak, the progress is faster than last year, the seed cotton purchase price rose considerably. The textile market is in the traditional peak season, with abundant orders from enterprises, increasing demand for raw materials, cotton prices at home and abroad continue to rise, the increase of foreign cotton is lower than that of domestic cotton, and the gap between domestic and foreign cotton prices is widening. New cotton centralized listed, commercial inventory increased substantially. The natioanl cotton reserves with a total of about 500,000 tons. According to the prediction of CCA, the total production of cotton in 2020 is 5.923,700 tons, up by 0.3% year on year. Affected by rainy weather, the Yangtze River basin is reduced by 0.78 million tons compared with the previous period, while other regions remain unchanged. As the cotton export in 2019 is reduced by 0.44 million tons compared with the previous period, the beginning inventory in 2020 is increased by 0.44 million tons compared with the previous period, and the ending inventory is reduced by 0.39 million tons compared with the previous period.

1.The National Cotton Harvest is Faster than Last Year

In October, the national cotton harvest was accelerated, and the progress was faster than last year. The cotton harvest in northern Xinjiang was nearly finished, and the cotton harvest in southern Xinjiang entered the peak period. Most of the mainland cotton growth stopped, the Yellow River valley cotton picking progress is the same as last year, selling faster than last year; The cotton harvest in the Yangtze River basin was slower than last year. By the end of October, the national picking progress was 91.82%, 2.94 percentage points faster than that of the previous year. The sales progress was 85.42%, 8.3 percentage points faster than that of the previous year. The average selling price was 6.44 yuan/kg, up 27.52% year on year.

2. The Purchase Price of Seed Cotton Rose

In October, the national cotton purchasing and processing entered the peak period, and the purchase price and processing amount of seed cotton were higher than the last year. Xinjiang acquisition price after the National Day continued to rise, in the second half of the gradual correction to stabilize; inland acquisition prices rose, cotton farmers are more wait-and-see attitude. As of October 31, the average purchase price of seed cotton of Grade 3128 in 400-scale cotton processing enterprises in China was 6.51 yuan/kg, up 21.23% year-on-year. The total processing volume was about 1.8691 million tons, up 20.83% year on year.

3. Domestic Cotton Prices rose by a Large Margin, the Difference between Domestic and Foreign Cotton Prices Widened

In October, the textile industry is still in the traditional peak season, the demand for raw materials increases, the domestic spot price rises greatly; With the second outbreak of the epidemic outside China, foreign cotton prices rose first and then fell within a month, and the gap between domestic and foreign cotton prices continued to widen. At the end of the month, CCIndex 3128B was 14,599 Yuan/ton, up 1,708 Yuan from the end of last month. The monthly average price was 13,953 Yuan/ton, up 1,156 Yuan month-on-month and 1,230 Yuan year-on-year. China's FC Index of imported cotton prices M averaged 76.47 cents a pound a month, up 5.13 cents month-on-month. At the end of the month, the price was 76.95 cents/lb, higher than 5.53 cents/lb at the end of the previous month. The difference between internal and external cotton prices was 1,022 Yuan compared with the end of last month.

4.A Large Number of New Cotton into the Market, Commercial Inventory Increased Substantially

In October, a large number of new cotton into the market, the commercial inventory increased significantly. At the end of the month, the total commercial inventory of cotton in China was about 3.192 million tons, up 52.51 percent month-on-month and down 1 percent year-on-year. Affected by the epidemic control and the peak season of Xinjiang fruit transportation, the export volume of cotton from Xinjiang increased slightly. The export volume of cotton from specialized warehouses in Xinjiang was 219,300 tons, an increase of 43,700 tons month-on-month and a decrease of 38,800 tons year-on-year.

5.Textile Market Transaction Active, Raw Material Inventory Increase

In October, textile market turnover is active, driven by the growth of domestic demand and the transfer of some export orders, the opening probability increased, enterprises actively replenish raw material inventory. For the month, yarn production was up 7.8 per cent month-on-month and 1.6 per cent year-on-year. Cloth output rose 6.7% month-on-month and 0.9% year-on-year. At the end of October, the industrial inventory of cotton of textile enterprises was 721,200 tons, up by 62,600 tons compared with the end of last month and up by 11,600 tons year-on-year.

China Cotton Supply and Demand Balance Sheet (Nov. 2020)      Million tons

Year

Begining Stock

Production

Import

Consumption

Export

Ending Stock

2020/21

790.52

592.37

198

799

3

778.89

2019/20

807.51

590.57

160

765

2.56

790.52

2018/19

802.6

611

205

807

4.1

807.51


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China Cotton Index (CC Index)
2021-10-27       more>>
  • CCindex (3128B) : 22313 99
  • CCindex (2227B) : 21099 70
  • CCindex (2129B) : 22805 87
Foreign Cotton Index (FC Index)
2021-10-27      more>>
  • FC index S: 124.06 0.25
  • FC index M: 122.74 0.22
  • FC index L: 121.21 0.22
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