Analysis Of Global Cotton And Textile Market

Good afternoon, everyone! Ladies and gentlemen, thank you for your very good introduction to me, and also thank China cotton The Association invited me to speak at this summit. Dr. Jiang and I may be the only two overseas participants who have participated in the Summit Forum of China Cotton Association every time. We know that this summit forum is held every two years, and we participate in it every time. Several guests met several years ago, and I have always spoken at each summit forum.

This time I was asked not to talk about supply, but more specifically about global cotton consumption policy The impact of. Not only do I pay attention to cotton related policies in China, but in fact, the global cotton market is very concerned about cotton related policies. The Cotton Outlook Weekly in my hands is released every week, and the English version is released every Friday. There is a review article in the latest weekly magazine, which assumes that the production and consumption of cotton in China is correct to some extent. The cotton reserve will increase in the next quarter from 2014 to 2015. It seems that it is in the opposite direction to the long-term direction. If so, I want to analyze some dependency problems, That is, the dependence between the international cotton market and the Chinese market. So I hope to discuss this issue with you.

To better illustrate this point, let's recall. Although China's cotton reserves have been increasing, the amount of cotton imported by China is also increasing. Look, 59% of American cotton exports are targeted at China. However, this proportion dropped by 14% in 2013. Let's take a look at Australian cotton. The export rate to the Chinese market has exceeded 70%. I know that Australian cotton is very popular in the market, which explains why the dependence is so high.

Let's take a look at the data of cotton printing. In 2012, about 77% of cotton was exported to China. This percentage dropped to 60% in 2013. Let's take a look at the situation of Brazilian cotton exports to China. From 2012/13 to 2013/14, in fact, this figure is slightly distorted, but at least it explains such a trend.

Let's take another look at the impact of cotton in the African franc region on China exit The situation may be the number brought by time lag, but it can also explain the dependence of global cotton on the Chinese market. I hope it can be clearly stated that China has indeed consumed a large amount of cotton produced globally. We see that 53% in 2013 and 44% in the next year, so the proportion of 53% and 44% is lower than 30% before that. What does it mean? That is, the Chinese government's policy decisions on cotton attracted the attention of industry analysts. For example, our cotton prospect is also studying how the Chinese government focuses on digesting cotton reserve stocks, which will affect China's cotton imports.

Let's take a look at the situation of global cotton exports to China in 2014/15. I think the decision of the Chinese government to digest its own cotton reserves will not have a significant impact on the international cotton market in the short term.

Look again at the PPT, which is the data on the increase of China's cotton yarn imports. The green represents the cotton yarn made in foreign countries, while the red represents the imported cotton yarn made in China for entrepot trade. That is, the cotton made in China returns to China through entrepot trade. By comparison, the number of 2012/13 is increasing year by year. China's appetite for cotton imports, especially in Asia, has had a very good impact, even in the United States. But let's take a look at India, which doubled in 2012/13. We can see that India has overtaken Pakistan as the main supplier of cotton yarn to China. In the past, Pakistan ranked first.

We have seen that China's cotton yarn import to Pakistan has dropped by 40%, which has had a huge impact on Pakistan's cotton yarn industry. This makes India better able to replace Pakistan now. India and Pakistan are very similar, that is, the lack of confidence of Chinese buyers has also affected Indian manufacturers, and the prices of Indian cotton yarn manufacturers have declined slightly.

In the short term, Pakistan believes that China is responsible for spin The lack of competitiveness in the industry will lead to the rise of cotton textile industry in other corresponding countries, which will make Pakistan's cotton textile industry a prosperous scene. India, on the other hand, predicts that China's policies will have a clear stimulating effect on the demand for cotton yarn in the near future, so the stimulating effect of China's policies on China's cotton yarn industry is not obvious in the short term.

Let's take a look at the point of global interest, that is, the competition of man-made fibers, especially in China, is increasing rapidly. We saw a decline in polyester prices in April 2014, which was a decline in the ratio of cotton prices. Let's take a look at the share of polyester fiber output, which has been growing steadily for three consecutive quarters. We know that the supply of polyester fiber is too abundant now. Let's take a look at China's cotton reserve policy. On the one hand, it is to promote China's cotton imports; On the other hand, China is encouraged to use more polyester and man-made fibers. In the global context, although long-term consumption is definitely increasing, compared with other man-made fibers, the proportion of cotton is gradually declining. For us, this will definitely have an impact on China's cotton market.

Let's take a look at the changes in global cotton consumption. We see that consumption has been declining in 2010/11 and 2011/12 due to the impact of the economic crisis. However, there will definitely be a rebound in consumption after 2012. However, we can't digest the excessive supply when we see such a benefit. Let's see. In 2010/11, production is higher than consumption, which is the watershed of this stage. The figure shows the inventory of (PPT) in 2014/15. This chart is the data from several weeks ago. I think the market is changing. The expectation was that the adjustment of the Chinese government's policies would gradually consume domestic cotton stocks. But now it is very clear that this is only a short-term effect. For example, President Zhou and Mr. Wang Zhengwei talked about this morning that there will be such a smooth road, and Ms. Dialect also said that China's cotton policy is still under exploration.

Let's take a look at the forecast of China's cotton output in 2014/15, which was up from the beginning. Our latest estimate is that China's production in 2014/15 will be about 6.4 million tons. In other words, it exceeded some people's expectations. Unless there is a policy, China's national cotton reserves will remain at a relatively large scale. So far, I have not been able to give a clear explanation of how the whole situation happened.

China's demand is declining, and some textile mills have been investing to expand overseas production. I believe that it includes the increase of some production factors and costs in raw coal, manpower and energy, plus the influence of policy factors. We know that this will have a certain impact on the market price, of course, mainly due to demand. We see that the policy control may, as just mentioned by several speakers, actually emphasize the market to adjust the price. The market will be affected. If the policy adjustment has a good effect on the market, this good effect will turn into a positive factor for the cotton market.

My conclusion: As the main challenge of China's cotton industry, we should all unite. If we do not increase cotton consumption, we should also maintain the current level of consumption. We must not go backwards. This is our red line. Thank you again!