According to the feedback from cotton traders and overseas entrepreneurs located in Qingdao, Zhangjiagang, Shanghai and other places, enquiries for bonded cotton and customs clearance cotton (imported cotton) have been showing signs of recovery since mid-December.
In particular, imported cotton has attracted the attention and favour of cotton textile mills and middlemen that has resulted in continually active transactions.
The rebound in imported cotton transactions was mainly due to the factors such as the widening of the price difference between domestic and foreign cotton as well as the early overdraft of 2021 cotton import quotas by some buyers.
What’s more interesting is the fading China and India trade tussle, as claimed by companies in China post-October 2020.
According to a renowned cotton company based in Jiangsu, the sales of high-quality Indian cotton have gradually improved since October ’20 (the quality and grade of lint cotton produced by CCI are more secure), and it has gradually squeezed the loss of Brazilian cotton ranked second in China’s cotton imports in October and November, second only to the cotton sourced from USA.
On the one hand, in the past 2 months, the price difference between Brazilian cotton and Indian cotton – which is the same as the commodity inspection index – has widened to 800-1000 RMB/tonne, and the price of Indian cotton has become more competitive; on the other hand – due to the short transportation distance and the increase in freight costs – the impact of the epidemic on ships is relatively controllable, so the shipment and delivery of Indian cotton is normal compared with Brazilian cotton and American cotton.
By the end of December ’20, the total amount of bonded cotton in China’s main ports may have reached 410-440 million tonnes which is largely contributed by US cotton, Brazilian cotton, Australian cotton, Indian cotton, African cotton, Central Asian cotton and European cotton.