Why Did Chinese Buyers Cancel The US Cotton Contract?

Despite the 6 month of January 31, 2020 -2, the net contract volume of the US upland cotton hit a new high this year, the number of manufacturing PMI and ADP employment in January, and the non farm employment data in the United States, while the US cotton planting area is expected to decline by 10%-12%. However, the main contract of the cotton futures contract rebounded in the short term and stood at 70 cents per pound, 72 cents / pound.


Some cotton enterprises believe that there are three main reasons for the suppression of the ICE disk: one is that China's new crown pneumonia epidemic is not yet turning point, whether it can effectively curb proliferation, prevention, control and treatment are still uncertain. Two, according to the first stage trade agreement between China and the United States, although the number of Chinese enterprises signing the US cotton has increased significantly, it is far from the contract cancellation. Three, USDA is the latest report that the global cotton stocks are rising, the consumption has declined considerably, and the pressure has been transmitted upstream.


Why did the Chinese buyers cancel the purchase contract in 24 weeks to two weeks in January? (32 thousand tons in January 31st -2 6, and the net contract volume was -1.1 million tons) in February 6th.


一些国际棉商、进口企业归纳如下：其一、新冠疫情这只“黑天鹅”飞出，不仅美国加工厂、出口商担忧情绪加重，中国采购企业也有推迟装运、交货的打算，买卖双方协商合同延后执行；其二、本年度ICE主力合约从57.65美分/磅最低点反弹至71.96美分/磅（3月），一些信誉度不高、合同意识弱的出口商采取推迟交货、要求签订新的货运合同等试图减少损失；其三、由于12/1月船期2019/20年度美棉等级、品质普遍不高（EMOT/ME为主，颜色级41-3、41-4、51-4及SLM；强力27-28GPT棉花占比较大），与我国大中型纺企的实际需求有些不匹配，因此协商船期调整至2/3月份；其四、截至目前中国政府尚未宣布下调或减免高额美棉进口关税，形势仍不明朗；另外滑准关税下，2019/20年度美棉价格、品质与新疆棉相比竞争力有待提高。