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ACSA: U.S. cotton prices fluctuate frequently, Australian cotton exports are optimistic
According to the report of the Australian Cotton Merchants Association (ACSA), the 2017/18 Australian cotton production was 4.6 million bales (1 million tons), a significant increase from the previous year’s 3.8 million bales (830,000 tons). At the same time, the improvement of cotton quality has boosted cotton exports. In 2017/18, global cotton consumption rebounded. The U.S. Department of Agriculture (USDA) estimated that it was 122.9 million bales (26.76 million tons), returning to the level of consumption during the global financial crisis. This means that in the past ten years, as the world's population has grown and the demand for textiles has grown, global cotton consumption has not increased along with it. On the surface, the main reason for the strong global cotton demand is the continued boom in U.S. cotton exports. However, it is worth noting that the quality of cotton in Texas is not very high, but is driven by the advantage of cotton prices. U.S. cotton is in the international market. The demand on the market is wide and the sales volume is large. In addition, the weather in West Texas is the focus of the market. As the dry weather continues, it is expected that the output of US cotton this year will be significantly reduced, and it is expected to be about 18 million bales (3.92 million tons). Therefore, the shortage of supply and demand in the United States has formed support for cotton prices, and the escalating trade friction between China and the United States has made the trade between China and the United States bear a lot of risks, and cotton prices fluctuate frequently. In recent months, the sales of reserve cotton in the Chinese market have remained hot, and the demand for cotton continues to be strong. With the reduction of reserve cotton stocks and the expected reduction in Xinjiang production, the cotton supply situation in China this year and even next year has become more and more tense. Therefore, the Australian Cotton Merchants Association believes that China's demand is still optimistic this year, and China's cotton import trends are worthy of attention. It is predicted that China's cotton imports will significantly exceed previous years in the second half of 2018 or 2019. In the coming weeks, during the transition period between the new and old cotton years, the international market, especially the Chinese market, will shift the demand for high-grade cotton from the United States to Australia, and the implementation and use of China's cotton import quotas will accelerate the formation of this trend. Article keywords: ACSAUSDA inventory