Australian Cotton Goods Did Not Pick Up, The Basis Rose Constantly

Judging from the quotations of some international cotton merchants and large cotton trading enterprises, although ice futures have been continuously callback in recent years and Sino Australian relations show no signs of improvement, Chinese cotton textile enterprises and middlemen are still cautious in signing contracts for procurement.

However, since the middle of November, the Australian cotton basis has hit the bottom and rebounded. Although the range is not very large (ice2103 + basis), the confidence and reluctance of traders have been recovering.

According to the survey, from December 3 to 4, the basis differences of aomian 21-3 / 31-337 (strong 31-32gpt) and November / December m 1-5 / 32 (strong 29gpt) rose to 16-16.8 cents / pound and 14-15 cents / pound respectively from December 3 to 4. The lint basis of all varieties and grades of Australian cotton increased by 0.5-1 cent / pound compared with the middle of November, among which SM 1-3 / 16, SM 1-7 / 32 and GM were increased by 0.5-1 cent / pound The basis difference of 1-7 / 32 and other high-quality Australian cotton increased slightly.

An international cotton merchant said that in October and November, it was mainly some old customers and large and medium-sized cotton mills that inquired about and purchased Australian cotton in a small amount and many batches. The shipment was not smooth, and the port inventory showed a slight upward trend; At present, although the quotation of Australian cotton for customs clearance at the port is relatively large and miscellaneous, the quantity of single batch is relatively low (50-200 tons of Australian cotton is relatively high, including Australian cotton in 2018, 2019 and 2020); the quantity of bonded and ship cargo is also small. On December 4, the quotation of Qingdao port SM 1-5 / 32 (strong 29gpt) was concentrated at 16400-16500 yuan / ton (including basis quotation).

The main reasons for Australia's strong cotton base are as follows: first, the basis of export competitors Brazil cotton and American cotton has been stable and strong; second, not only the total cotton production and quality of India, Pakistan and West Africa in 2020 / 21 are "not enough", but the cotton planting area of Brazil and Central Asian countries is expected to decline significantly in 2020; Thirdly, in 2020 / 21, the indexes of cotton color grade, strength and length in Xinjiang of China are weak, and Australian cotton is waiting for the opportunity; fourthly, the vaccine has entered the stage of comprehensive vaccination and the introduction of the US government's strong economic stimulus plan is conducive to accelerating the recovery of global economy and cotton consumption; high grade Australian cotton will have a great market; Fifthly, in 2020, Australia's cotton output is only about 600000 bales, plus about 450000 bales carried forward in the previous year, and the total amount of available exports is less than 1 million bales. Therefore, exporters and international cotton merchants generally feel little pressure and have enough confidence to maintain prices and resist falling prices.