Why Indian cotton prices remain high

Judging from the quotations of some foreign businessmen and large import companies, since late June, the main ICE contract has continued to fluctuate in the 66-69 cents/lb box (low 66.15 cents, a record low since September 2016). (Including 2016/17, 2017/18 new flowers), Australian cotton, West African cotton new flowers, Uzbekistan and other spot quotations continued to fall, but Indian cotton S-6 did not dive with the deep adjustment of ICE and external disks. Flower factories and exporters are very calm. According to statistics from the Ministry of Agriculture of India, as of June 29, the sown area of u200bu200bcotton has reached 71.865 million mu, a year-on-year increase of 56.5%, which is much higher than the expectations of all parties; as of June 30, the total number of new Indian cotton marketed in India reached 5.554 million. Tons, higher than the 5.454 million tons in the same period last year, but the ex-factory prices of Indian cotton ginning plants and the quotations of the main ports in the Far East are still high and stable, which is contrary to the international cotton price trend. July 13-16, Qingdao, Zhangjiagang, Shanghai and other main ports July/August shipping schedule C/A SM 1-1/8”, EMOT SM 1-1/8” and SM 1-5/32” Australian cotton, SM West Africa cotton is quoted at 81.65-81.75 cents/lb, 78.60-78.70 cents/lb, 84.10-84.20 cents/lb, 79.10-79.25 cents/lb. S-6 1-1/8” China The main port quotation is as high as 84.20-84.25 cents/lb, even slightly higher than the Australian cotton price, upside down with EMOT SM reached 5.50-5.65 cents/lb, which is more than 5 cents/lb higher than West African cotton. From the survey, since mid-June, high-quality Australian cotton, American cotton, and U.S. cotton inspections, inquiries, and contracted shipments have been active since mid-June. Bonded and spot contracts have increased, but S-6, J34, and MCU5 When Indian cotton is shipped slowly, and the response is few, then what is the reason for the high price of Indian cotton, and sellers would rather be short of it? The author's analysis is as follows: 　　 First, there is almost no room for profit and price reduction in every link of Indian cotton from the ginning plant to the exporter. Affected by the 2016/17 MSP upward adjustment, new monetary policy, GST, etc., the purchase price of Indian seed cotton has been rising all the way, and the cost of lint has gone up; and the strong exchange rate of the Indian rupee against the US dollar has added fuel to the price of Indian cotton. , Exporters have almost no room for relaxation and bargaining, and a little carelessness will lead to a situation of losing everything.　　Second, the number of foreign merchants and traders dealing in Indian cotton has decreased significantly. According to the survey, there have been fewer and fewer international cotton merchants operating and operating Indian cotton since 2013, and Indian ginning enterprises that directly export have gradually disappeared. This is due to the significant increase in domestic demand for cotton and the decline in exports. , Even when cotton prices have risen and fallen sharply, Indian cotton farmers, cotton processing companies, and exporters often unilaterally raise prices, postpone shipments, breach contracts or cancel large-scale supply contracts, etc., causing heavy losses to international cotton merchants and purchasers, etc. Factors, so in recent years, Indian cotton has fewer and fewer business entities.　　 Third, Indian companies estimate that their domestic cotton consumption capacity is relatively high. According to the latest USDA monthly report, India's domestic cotton consumption in 2017/18 was about 5.389 million tons, an increase of 218,000 tons compared to 2016/17. Statistics from relevant Indian ministries are more optimistic.　　Fourth, India’s cotton planting costs, labor wages and other taxes, financial costs, etc. have risen significantly. According to the survey, in recent years, Indian workers' wages, prices of agricultural materials, cotton planting inputs, and financing costs have been rising. Among Southeast Asian countries, the cost advantages of cotton, spinning, weaving, and clothing have all declined. Same, in the bottleneck period of transformation. Article Keywords: 　Indian Cotton