Weak Base Futures ICE Futures To Curb Demand For Cotton

In the past 1-2 weeks, with the rise of ICE futures, the international spot market has been reduced, and the rise in spot quotas has depressed demand in the wake of the stagnation of yarn sales.

Australia cotton is almost impossible to close at the current price, and Australia cotton and many other high-grade cotton bases are showing signs of weakness. The 4-5 month shipment of SM 1-5/32 G5 Australia's main port price is still under enquiry, with a base of 1750-1775 points (May contract).

It is estimated that before ICE futures fall to 74-75 cents, Australia cotton will not have any decent sales.

However, cotton farmers are not in a hurry to sell when there is a high level of supply shortage.

Brazil cotton base difference is more obvious, Chen cotton and Xin cotton quotes are all the same. Taking into account the substantial increase in cotton production, cotton traders are careful to hold stocks. The basis of new cotton quotas in 9-11 months has begun to weaken. The M 1-1/8 G5 base is less than 800 points (December contract), down 150 points from last month.

After the change in ICE futures and base movements, Australian cotton traders significantly increased their pressure on shipping before 8/9 months.

The US cotton basis is under pressure. The GC EMOT 31-3-36 G5 spot price (4-5 month shipment) basis is 1000 points (May contract), down 60-75 points from last month.

India cotton has basically separated from the export market. The base of M 1-1/8 G5 is 1050 points, higher than that of Brazil cotton, American cotton and West African cotton.

Bangladesh's textile and clothing exports are still heavily resisted. It is reported that the country illegally imports large quantities of cheap cotton yarn from China and India. The price of 30 yarn is only 2.70 dollars / kg, which is 30 cents less than that of the normal channel, not to mention that the finished product inventory of the cotton mill is high.

At the same time, cotton merchants also face problems of late letter of credit and difficult implementation of contracts. At least one big factory has been blacklisted.

The factory needs cotton yarn price rise to solve this problem, I am afraid that only after the India cotton yarn prices rise sharply.