Market Analysis: Expected Increase In China'S Cotton Imports

 

According to foreign news on April 30, cotton futures on the Intercontinental Exchange (ice) closed up about 1.8% on Friday, and cotton futures also recorded gains this month as the market expected to increase China's import volume.

 

On April 30, the official website of the national development and Reform Commission issued a notice on the application of import quota of preferential tariff rate beyond cotton tariff quota in 2021. The number of cotton import sliding standard tax quota issued is 700000 tons, all of which are non-state-owned trade quotas. Among them, 400000 tons are limited to processing trade; The mode of trade is not limited to 300000 tons, and the enterprises that have obtained the quota can choose and determine the trade mode by themselves when applying for the quota certificate. Enterprises can apply for processing trade quota or quota without restriction of trade mode, or apply at the same time.

 

In recent months, may cotton contracts closed up 1.54 cents, or 1.79%, and settled at 87.43 cents a pound.

 

The most active July contract closed up 1.54 cents, or 1.78%, at 88.08 cents a pound.

 

The contract has risen more than 7 per cent this month, tracking gains in grain prices such as soybeans, corn and wheat.

 

Sto Bailey thomen, a risk manager at nex group, said China's announcement of preferential tariff rate import quotas outside the tariff quota on cotton has boosted market buying.

 

Jobe moss, a broker at MCM Inc, said it expects demand outside the U.S. to dominate U.S. cotton futures in the coming weeks.

 

"People are beginning to pay attention to the west of Texas, if the local cotton production prospects are good, then the price of cotton will be under pressure."

 

Analysts said that despite the recent local rainfall process, but for the growth of cotton crops, still not enough.

 

Peter egli, President of risk management at plexus cotton, said: "there are indeed showers in western Texas in the near future, but unless soil moisture is further improved in the future, it will have little impact on the local cotton production prospects."

 

As of April 29, ice's deliverable No. 2 cotton contract inventory was 95536 bales, flat from the previous trading day.