Australia cotton exports to China or bottomed back in 2020

According to customs statistics, in 2020, American cotton accounts for 45% of China's total cotton imports, followed by Brazilian cotton and Indian cotton, accounting for 29% and 12% respectively; while the proportion of Brazilian cotton and Australian cotton in the top two leading export volume in 2019 has declined significantly, especially the middle and high quality Australian cotton is becoming far away from the Chinese market, which is not concerned or ignored by textile enterprises and traders.

According to the feedback from several international cotton manufacturers and Australian cotton export enterprises, the inquiry and transaction of the goods, bonded and customs clearance of Australian cotton in January February 2021 are still relatively cold and clear, which is in sharp contrast with the phased activity of Indian and Brazilian cotton.

There are three reasons for the analysis in the industry: one is that the Sino Australian relationship is difficult to repair due to the continuous damage of Australia; the second is that the cotton production in Australia is only about 600000 bales in 2020, and the high quality and high-quality cotton accounts for relatively low level in 2020; thirdly, the price of Australian cotton in 2020 is significantly higher than that of the competitors such as American cotton and Brazilian cotton (the base difference between Australia and Australia once reached 22-23 cents / pound, but it is now down to 13-15 Cent / pound).

However, the author believes that in 2021, Australian cotton exports to China are expected to stabilize and rebound, and the proportion of cotton imports in China is expected to rise, including the following reasons:

First, with Biden entering the White House, China US confrontation in trade, politics, military and other fields is expected to ease, China Australia relations are expected to break ice with the recovery of Sino US relations; second, the total cotton output in Australia is expected to reach 2.6 million bales in 2020 / 21 (up nearly 2 million packages compared with the previous year), and the grade and quality are relatively ideal. The demand for purchasing low-index cotton with national gauze factories such as Vietnam and Bangladesh is expected to ease The third is that with the rapid recovery of global economy, trade and transportation, the demand for high-quality and high-grade cotton consumption of Chinese textile enterprises continues to rise. On the one hand, China's domestic cotton is not only expensive but also supply is tight; although Australian cotton is weak in strength, 1-3/16 and above indicators can still partially replace long-term cotton with cotton spinning high-end yarn; on the other hand, the U The price difference between Australian cotton and American cotton and Brazilian cotton has been narrowing.

From the survey, the net weight "one now price" of Macao cotton spot m 1-1/8 and m 1-3/16 in Qingdao and Zhangjiagang are 17500-17700 yuan / T and 18000-18100 yuan / ton respectively; the price difference of 31-437 of the same quality and the same quality is 17350-17450 yuan / ton; the price difference of M 1-1/8 Brazilian cotton is 16600-16700 yuan / ton, which is continuously reduced compared with the previous months.