In June 2023, global cotton production and consumption increased slightly. The trend of domestic cotton prices is stronger than that of foreign cotton, and the price of domestic and foreign cotton yarn fluctuates upward. As of press time, domestic cotton prices fluctuated strongly in mid-to-early July.
First, the supply and demand situation
(1) Global cotton production and consumption in 2023/24 increased year-on-year
Data released by the International Cotton Advisory Committee (ICAC) in July 2023 shows that in 2022/23, Global cotton opening stocks were 19.407 million tons, down 13,000 tons month-on-month and 785,000 tons year-on-year; output was 24.679 million tons, up 169,000 tons, down 497,000 tons; consumption was 23.880 million tons, up 90,000 tons, down 1.951 million tons; ending stocks were 20.206 million tons, up 66,000 tons, up 799,000 tons; ending inventory consumption was 84.61%. In 2023/24, the global cotton opening stock was 20.206 million tons, an increase of 799,000 tons; the output was 26.526 million tons, an increase of 1.847 million tons; consumption was 24.411 million tons, an increase of 531,000 tons; ending stocks were 22.321 million tons, an increase of 2.116 million tons; and the consumption ratio of ending stocks was 91.44%, an increase of 6.83 percentage points year-on-year.
(2) Cotton sales in 2022/23 are nearing the end Yarn production decreased year-on-year
According to the estimated output of domestic cotton of 6.719 million tons (forecast of the National Cotton Market Monitoring System in March 2023), as of July 13, the cumulative sales of seed cotton folded lint cotton nationwide were 6.719 million tons, an increase of 918,000 tons year-on-year, of which 6.227 million tons were sold in Xinjiang; 6.719 million tons of lint cotton was processed, an increase of 918,000 tons, of which 6.227 million tons were processed in Xinjiang; and 6.611 million tons of lint cotton were sold in Xinjiang, an increase of 2.861 million tons year-on-year, of which 6.124 million tons were sold in Xinjiang.
In May 2023, the mainland spinning output was 1.9417 million tons, a year-on-year decrease of 290,000 tons, a decrease of 13.0%; From September 2022 to May 2023, the cumulative spinning output of mainland China was 18.9275 million tons, a year-on-year decrease of 2.263 million tons, a decrease of 10.7%.
2. Import and export trade
(1) China
1. Cotton imports from China
In May 2023, mainland cotton imports were 109,200 tons, a year-on-year increase of 02,000 tons, a year-on-year increase of 1.7%. From September 2022 to May 2023, mainland cotton imports were 1,056,800 tons, a cumulative decrease of 671,000 tons year-on-year, a cumulative decrease of 38.9% year-on-year (Figure 1).
From September 2022 to May 2023, the main source countries of mainland cotton imports were: the United States (50.3%), Brazil (38.7%), Australia (2.9%), Sudan (1.6%), Myanmar (1.4%), Turkey (1.1%), Egypt (0.9%), India (0.7%).
Among them, the countries or regions with a year-on-year increase in the proportion of imports are: Brazil (+12.6%), Australia (+1.9%), Myanmar (+0.6%), Turkey (+0.6%); Countries or regions that decreased their year-on-year share of imports were: the United States (-7.5%), India (-2%), Sudan (-0.2%), and Egypt (-0.1%) (Figure 2).
2. Import of cotton yarn from China
In May 2023, mainland cotton yarn imports were 129,000 tons, a year-on-year decrease of 02,000 tons, a year-on-year decrease of 1.5%. From September 2022 to May 2023, mainland cotton yarn imports were 850,800 tons, a cumulative decrease of 403,000 tons year-on-year, a cumulative decrease of 32.1% year-on-year (Figure 3).
From September 2022 to May 2023, the main sources of mainland cotton yarn imports were: Vietnam (53.9%), Pakistan (12.6%), India (7.9%), Uzbekistan (6.4%), Malaysia (5.2%), and Taiwan (4.7%).
Among them, the countries or regions with a year-on-year increase in the proportion of imports are: Vietnam (+4.1%), Malaysia (+1.4%), Taiwan (+1.1%), Pakistan (+0.4%); Countries with year-on-year decreases in imports were India (-4.7%) and Uzbekistan (-3.8%) (Figure 4).
3. China's clothing exports
In May 2023, mainland apparel exports amounted to US$12.79 billion, a year-on-year decrease of US$1.75 billion, a year-on-year decrease of 12%. From September 2022 to May 2023, mainland apparel exports amounted to US$113.503 billion, a cumulative year-on-year decrease of US$6.80 billion, a cumulative year-on-year decrease of 5.7% (Figure 5).
From September 2022 to May 2023, the main destinations of mainland apparel exports were: the United States (19.3%), Japan (8.7%), South Korea (4.7%), Kyrgyzstan (4.2%), Australia (3.6%), Vietnam (3.1%), Malaysia (3%), Kazakhstan (2.9%).
Among them, the countries or regions with a year-on-year increase in the proportion of exports are: Kazakhstan (+1.8%), Vietnam (+1.8%), Kyrgyzstan (+0.9%), South Korea (+0.6%), Australia (+0.4%); Countries or regions that decreased their year-on-year share of exports were the United States (-3.7%) and Malaysia (-0.2%) (Figure 6).
(ii) United States
1. U.S. cotton exports
In May 2023, U.S. cotton exports were 324,000 tons, down 73,000 tons, or 18.4%, year-on-year. From September 2022 to May 2023, U.S. cotton exports amounted to 2.119 million tons, a cumulative decrease of 228,000 tons or 9.7% year-on-year (Figure 7).
From September 2022 to May 2023, the main destinations for U.S. cotton exports were: China (23.5%), Pakistan (16.6%), Vietnam (12.6%), Turkey (12.5%), Mexico (4.8%), Bangladesh (4.8%), Macau (4.6%), Indonesia (3%).
Among them, the countries or regions with a year-on-year increase in the proportion of exports were: Pakistan (+4.8%), Macao (+4.6%), Turkey (+1.3%), Bangladesh (+1.2%), Indonesia (+0.4%); Countries or regions that decreased their share of exports year-on-year were: China (-11.4%), Mexico (-1.6%), and Vietnam (-0.3%) (Figure 8).
2. U.S. clothing imports
In May 2023, U.S. apparel imports were US$6.36 billion, a year-on-year decrease of US$2.18 billion, or 25.5% year-on-year. From September 2022 to May 2023, U.S. apparel imports amounted to US$62.4 billion, a cumulative decrease of US$9.97 billion year-on-year, or a cumulative year-on-year decrease of 13.8% (Figure 9).
From September 2022 to May 2023, the main sources of clothing imports in the United States were: Chinese mainland (19.6%), Vietnam (17.2%), Bangladesh (9.7%), India (5.9%), Indonesia (5.7%), Cambodia (4.1%), Mexico (3.7%), and Honduras (3.4%).
Among them, the countries or regions with a year-on-year increase in the proportion of imports are: Bangladesh (+0.5%), Mexico (+0.4%), Honduras (+0.3%), Vietnam (+0.2%); Countries or regions with year-on-year decreases in imports were: Chinese mainland (-3.6%), Cambodia (-0.4%), and Indonesia (-0.1%) (Figure 10).
(3) Imports of Japanese clothing
In May 2023, Japan's clothing imports were US$1.51 billion, a year-on-year decrease of US$300 million, or 16.6% year-on-year. From September 2022 to May 2023, Japan's clothing imports amounted to US$18.555 billion, a cumulative year-on-year increase of US$370 million, a cumulative year-on-year increase of 2% (Figure 11).
From September 2022 to May 2023, the main destinations for Japanese apparel imports were: Chinese mainland (53.1%), Vietnam (16.4%), Bangladesh (5.4%), Myanmar (5.2%), Cambodia (4.7%), Indonesia (3.3%), Italy (3.3%), Thailand (1.5%).
Among them, the countries or regions with a year-on-year increase in the proportion of imports are: Vietnam (+2.3%), Myanmar (+1.7%), Italy (+0.5%), Indonesia (+0.1%); Countries or regions that decreased their share of imports year-on-year were: Chinese mainland (-4.7%) and Cambodia (-0.3%) (Figure 12).
(4) EU clothing imports
In April 2023, EU clothing imports were US$6.27 billion, a year-on-year decrease of US$1.39 billion, or 18.1% year-on-year. From September 2022 to April 2023, EU clothing imports amounted to US$65.983 billion, a cumulative year-on-year increase of US$1.44 billion, or 2.2% year-on-year (Figure 13).
From September 2022 to April 2023, the main sources of EU clothing imports were: Chinese mainland (27.9%), Bangladesh (22.2%), Turkey (11.2%), Vietnam (4.8%), India (4.7%), Pakistan (3.9%), Cambodia (3.8%), Myanmar (3.4%).
Among them, the countries or regions with year-on-year increase in the proportion of imports were: Vietnam (+1%), Myanmar (+0.9%), Bangladesh (+0.8%), Cambodia (+0.3%), Pakistan (+0.2%); Countries or regions that decreased their share of imports year-on-year were: Chinese mainland (-2.2%) and Turkey (-1.3%) (Figure 14).
(v) India
1. Indian cotton imports
In May 2023, India's cotton imports were 21,500 tons, down 02,000 tons year-on-year or 7.3% year-on-year. From September 2022 to May 2023, India's cotton imports were 224,900 tons, a cumulative year-on-year increase of 103,000 tons, a cumulative year-on-year increase of 85.1% (Figure 15).
From September 2022 to May 2023, the main source countries of Indian cotton imports were: the United States (30.6%), Australia (30.3%), Egypt (10%), Singapore (4.4%), Tanzania (4%), Brazil (3.3%), Switzerland (3.1%), and Côte d'Ivoire (2.9%).
Among them, the countries or regions with a year-on-year increase in the proportion of imports were: Australia (+11.5%), Singapore (+3.9%), Tanzania (+2.9%), Brazil (+2%), Switzerland (+1%), Côte d'Ivoire (+0%); Countries or regions that decreased their year-on-year share of imports were: the United States (-12.1%) and Egypt (-3.7%) (Figure 16).
2. Indian cotton exports
In May 2023, India's cotton exports were 29,100 tons, basically unchanged year-on-year. From September 2022 to May 2023, India's cotton exports were 191,900 tons, a cumulative decrease of 535,000 tons year-on-year, a cumulative decrease of 73.6% year-on-year (Figure 17).
From September 2022 to May 2023, the main destinations of India's cotton exports were: Bangladesh (71%), Vietnam (9.7%), China (7.8%), UAE (5%), Indonesia (3.5%), Armenia (1%).
Among them, the countries or regions with a year-on-year increase in exports were: the United Arab Emirates (+3.6%), China (+1.9%), Bangladesh (+1.1%), Armenia (+0.9%); Countries or regions that decreased their year-on-year share of exports were Vietnam (-2.6%) and Indonesia (-2.6%) (Figure 18).
3. Indian cotton yarn export
In May 2023, India's cotton yarn exports were 86,300 tons, up 34,000 tons year-on-year, or 63.4% year-on-year. From September 2022 to May 2023, India's cotton yarn exports were 576,900 tons, a cumulative decrease of 372,000 tons year-on-year, a cumulative decrease of 39.2% year-on-year (Figure 19).
From September 2022 to May 2023, the main destinations of Indian cotton yarn exports were: Bangladesh (29.2%), China (15%), Egypt (6.5%), Portugal (5.6%), Turkey (5%), Peru (4.6%).
Among them, the countries or regions with a year-on-year increase in exports were: China (+2.9%), Egypt (+1.4%), Portugal (+1.1%), Peru (+0.8%), Turkey (+0.7%); The country or region that decreased the year-on-year share of exports was Bangladesh (-13.6%) (Figure 20).
(vi) Australian cotton exports
In May 2023, Australian cotton exports were 50,600 tons, a year-on-year increase of 18,000 tons, a year-on-year increase of 54.7%. From September 2022 to May 2023, Australian cotton exports were 804,200 tons, a cumulative increase of 366,000 tons year-on-year, a cumulative increase of 83.5% year-on-year (Figure 21).
From September 2022 to May 2023, the main destinations of Australian cotton exports were: Vietnam (40.9%), Indonesia (11.3%), Pakistan (10.8%), Bangladesh (8.1%), Thailand (6.6%), India (5.7%).
Among them, the countries or regions with a year-on-year increase in the proportion of exports are: Pakistan (+6.9%), Bangladesh (+4.7%), India (+2.3%), Vietnam (+1.1%); Countries or regions that decreased their share of exports year-on-year were Indonesia (-11.1%) and Thailand (-0.5%) (Figure 22).
(vii) Brazilian cotton exports
In June 2023, Brazilian cotton exports were 60,300 tons, a year-on-year decrease of 02,000 tons, a year-on-year decrease of 3.8%. From September 2022 to June 2023, Brazilian cotton exports were 1,313,900 tons, a cumulative decrease of 298,000 tons year-on-year, a cumulative decrease of 18.5% year-on-year (Figure 23).
From September 2022 to June 2023, the main destinations of Brazilian cotton exports were: China (30%), Bangladesh (16.7%), Vietnam (15.1%), Pakistan (13.1%), Turkey (10.8%), Indonesia (5.6%), Malaysia (3.5%), South Korea (2.1%).
Among them, the countries or regions with a year-on-year increase in the proportion of exports are: Bangladesh (+4.6%), China (+2.1%), Pakistan (+1.9%); Countries or regions that decreased their share of exports year-on-year were: Indonesia (-3.4%), Turkey (-2.8%), Vietnam (-1.2%), Malaysia (-0.4%), and South Korea (-0.4%) (Figure 24).
Third, macroeconomics
(1) Global macro overview
In June 2023, the global manufacturing purchasing managers' index (PMI) declined overall, and the manufacturing purchasing managers' index (PMI) of major economies diverged, with China's official manufacturing PMI rising month-on-month and the US, Japan and Eurozone manufacturing PMIs falling month-on-month (Figure 25).
In June 2023, the National Bureau of Statistics released a manufacturing PMI of 49, up 0.2 percentage points month-on-month, and Caixin China's manufacturing PMI, which represents small and medium-sized enterprises, was 50.5, down 0.4 percentage points month-on-month (Figure 26).
In May 2023, the increase in domestic clothing ex-factory prices narrowed month-on-month, and the increase in downstream consumer prices expanded month-on-month. The Clothing Producer Price Index (PPI) released by the National Bureau of Statistics was 1.4% year-on-year, down 0.6 percentage points from the previous month, and the clothing consumer price index (CPI) was 0.9% year-on-year, unchanged from the previous month (Figure 27).
(2) The situation of the domestic financial market
In June 2023, the trend of each maturity offered rate in the Shanghai interbank market diverged, with overnight and short-term interest rates rising slightly month-on-month, and medium- and long-term interest rates falling steadily. On June 30, the Shanghai Interbank Offered Rate was 2.168%, down 5.1 basis points from the previous month (Figure 28).
In June 2023, the RMB continued to weaken against the US dollar, with the USD/CNY mid-rate of 7.2258 on June 30, a month-on-month depreciation of 1,437 basis points (Figure 29).
(3) Global commodity price trends
In June 2023, global commodity prices retreated after a slight spike. As of June 30, the CRB index, which represents global commodity price movements, closed at 261.99, up 3.21% from the previous month (Figure 30).
4. Price trends
(1) The trend of domestic cotton prices is stronger than that of foreign cotton
As of June 30, the national cotton price B index was 17305 yuan / ton, up 985 yuan / ton from the previous month, the main contract of Zhengmian futures was 16575 yuan / ton, up 1045 yuan / ton from the previous month, the international cotton M index (discount 1% tariff RMB import cost) was 15479 yuan / ton, down 645 yuan / ton from last month, and the settlement price of the main contract of ICE cotton futures was 80.37 cents / pound, down 3.11 cents / pound from the previous month; The price difference between internal and external cotton was 1826 yuan / ton, which expanded by 1630 yuan / ton from the previous month (Table 1, Figure 31, Figure 32). As of press time, domestic cotton prices fluctuated strongly in mid-to-early July.
(2) Domestic and foreign cotton yarn prices fluctuated upward
As of June 30, China's 32 pure carded cotton yarn was 23,915 yuan / ton, up 430 yuan / ton from the previous month; India's 32 carded cotton yarn 23,575 yuan / ton, up 344 yuan / ton from the previous month; Vietnam's 32 pure carded cotton yarn 23,566 yuan / ton, up 655 yuan / ton from the previous month; Indonesia's 32 carded cotton yarns were 24,354 yuan / ton, up 511 yuan / ton from the previous month; Pakistan's 21 carded cotton yarn was 21,917 yuan / ton, up 237 yuan / ton from the previous month (Table 2, Figure 33).
(3) The price difference of yarn and cotton narrowed The price difference of polyester cotton widened
As of June 30, the domestic yarn cotton price difference was 6610 yuan / ton, down 555 yuan / ton from the previous month; The price difference of polyester cotton was 10,178 yuan/ton, an increase of 1,063 yuan/ton from the previous month (Table 3, Figure 34).
Editor's note: This report mainly reflects the cotton industry related information in the month before the release, the report data involves cotton production and demand, import and export, macroeconomics and cotton textile prices, etc., because the global cotton supply and demand forecast and customs import and export data of various countries are generally released in the middle of each month, so this report is released in the middle of each month, if the domestic and foreign market conditions change greatly in the week before the release, then supplement the recent trend description as appropriate. This report only provides an objective analysis of the cotton industry, if you need more market outlook, please pay attention to the "China Cotton Market Monthly Report - Forecast".