India, the world's first-largest cotton-producing country and the second-largest cotton-exporting country, has an important impact on the world's cotton prices.
In the last two years, the Indian cotton bollworm has been hit by the red cotton bollworm, which has led to the production of cotton in the Indian cotton.
In 2018, the Indian government raised the minimum support price of cotton MSP by about 26-28%, with the minimum support price of long-staple cotton increasing by 26.16% to 5450 rupees per litre. Medium wool rose by 28% to 5150 rupees per cum. Greatly stabilized the Mahalat, Gujarat and Madhya Pradesh cotton conversion rate of relatively high rates of cotton planting sentiment. And India raised MSP prices also supported the overall cotton market prices. High cotton prices have also led to losses for the downstream spinning industry in India State, at present, India's yarn profits are at the lower level of the calendar year.
In addition to the 1% tariff quota of 894000 tons stipulated by WTO, our government issued an additional quota of 800000 tons to textile enterprises above the scale in October this year. The deadline is February 2019. At present, there is no extension notice. In view of the gap after the stock of reserve cotton is reduced, most of the market expects that our cotton import market will be liberalized step by step. The quota applied by enterprises with a capacity of more than 50,000 gauze ingots in the near future, whether to consider the import quota of enterprises under 50,000 gauze ingots at a later stage. If liberalize gradually goes step by step, our cotton market imports will appear marketization.
However, at present, the 800000 ton quota enterprises have only been in use for more than two months. In the context of the current Sino-US trade war, American cotton has been imposed a tariff of 25 percent, and now it has eliminated American cotton. The other options available are Indian cotton and Brazilian cotton. Judging from the current price situation, because of the weak purchase price of new cotton in the domestic market, the cost of cotton in Xinjiang, especially in northern Xinjiang, is generally lower than that of imported cotton from any country. The Indian cotton quotation is directly converted into a quasi-clearance cost of 15500-16,000 yuan per ton. Brazilian cotton is more than 16000 yuan / ton, but India cotton import price ratio is on the low side, in the short term, the whole import is moving. Lack of power, such as the release of partial quotas, can lead to import volume is also relatively limited.
The United States is the world's third largest cotton producer and the world's largest cotton exporter. In the year 2018 / 19, US cotton production is expected to be 4.05 million tons and exports are 3.27 million tons. Cotton exports account for about 36 percent of the world's total cotton exports.
In terms of output, Texas, one of the major production areas of 18th-19, has suffered a long drought since April. The cumulative precipitation is only about 77% of the normal level. Two strong hurricanes (Florence and Michael) hit the southeast in September-October and affected the southeast cotton region. The U.S. cotton production has shrunk significantly, with 18 / 19 production expected to be about 4.05 million tons, down about 11 percent from a year earlier.
Judging from the export situation, as a result of the Sino-US trade friction, China imposed an additional tariff of 25% on American cotton, which led to a sharp decline in the signing of cotton exports, and the original China's contract was canceled continuously. As of December 6, China had signed up to export 3.29 million bales, compared with the same period last year, with a reduction of 30 points, which is lower than the previous five years in the same period of 15.
