【2023 Chairman's Interview】The cotton price is expected to transition smoothly in 2023.

【2023 Chairman's Interview】The cotton price is expected to transition smoothly in 2023.
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  • 【2023 Chairman's Interview】The cotton price is expected to transition smoothly in 2023.
After experiencing significant price fluctuations, the market ushered in 2023. This year is expected to be one of valuation reversion and stable transition for cotton prices.
In 2023, the global economy will move from stagflation towards recession and depression amid a quartet of challenges: COVID-19 infections, inflation, interest rate hikes, and geopolitical conflicts. Rapid interest rate increases and persistently high interest rates are the triggers for this economic downturn. In contrast, the Chinese economy is expected to recover in 2023. With the optimization of epidemic prevention policies and the implementation of stable growth policies, consumption is expected to recover and stabilize; investment will remain stable, and the real estate market is expected to bottom out and rebound; exports will continue to decline due to overseas recession. Therefore, a cautiously optimistic outlook for the Chinese economy is maintained.
Regarding the industry, the global supply side is stable, but terminal consumption is continuously declining as the global apparel industry enters a destocking cycle, resulting in a loose global supply and demand pattern. Domestically, with a confirmed bumper harvest, domestic sales are expected to bottom out and rebound due to the optimization of epidemic prevention policies. However, external sales remain weak due to the continued destocking cycle in Europe and America and restrictions on the export of Xinjiang cotton and related products. Therefore, the overall supply and demand situation in 2023 will remain loose.
In terms of valuation, cotton prices are currently undervalued, whether compared longitudinally or laterally. According to cyclical theory, prices tend to revert to the mean.
Therefore, given the upward trend in China's macroeconomic conditions, mean reversion, and improvement in domestic industrial sales, while the supply and demand situation remains loose, cotton prices are expected to experience a stable transition.

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Leaders from Xiamen C&D Group visited Tongzhou for investigation and guidance

Leaders from Xiamen C&D Group visited Tongzhou for investigation and guidance

On March 3, Wang Yongqing, Vice President of Xiamen CNOOC Group, visited Tongzhou Group for investigation and guidance. Wei Gangmin, Chairman of our company; Huang Hongyu, President; Li Tao, Vice President; and Zhang Zhiyan, Director of the General Office, met with and participated in a symposium.

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Leaders from Xiamen C&D Group visited Tongzhou for investigation and guidance
Tongzhou Cotton Market Brief, Week 1 of March 2025

Tongzhou Cotton Market Brief, Week 1 of March 2025

1) This week's National People's Congress and the Chinese People's Political Consultative Conference (NPC & CPPCC) in China boosted market expectations for steady growth. In February, the Purchasing Managers' Index (PMI) for manufacturing stood at 50.2%, up 1.1 percentage points from the previous month, indicating a significant improvement in the manufacturing sector.

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Tongzhou Cotton Market Brief, Week 1 of March 2025
In 2024, China's exports of dyed and printed fabrics to Vietnam and Bangladesh increased significantly.

In 2024, China's exports of dyed and printed fabrics to Vietnam and Bangladesh increased significantly.

In 2024, China's dyeing industry saw rapid export growth to ASEAN and RCEP member countries, exceeding the overall export growth rate. However, this growth was accompanied by a decline in prices. From January to December, China's exports of eight major dyeing products to ASEAN totaled 7.908 billion meters, a year-on-year increase of 12.14%, 4.61 percentage points higher than the overall export growth rate, accounting for 23.58% of total exports. The average export price was US\$1.19 per meter, a year-on-year decrease of 2.75%, 0.64 percentage points lower than the overall decline. Exports to RCEP member countries totaled 8.431 billion meters, a year-on-year increase of 11.35%, 3.82 percentage points higher than the overall export growth rate. The average export price was US\$1.17 per meter, a year-on-year decrease of 2.79%, 0.60 percentage points lower than the overall decline.

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In 2024, China's exports of dyed and printed fabrics to Vietnam and Bangladesh increased significantly.
President Huang Hongyu was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference

President Huang Hongyu was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference

On February 28, Mr. Huang Hongyu, President of our company, was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference and, as a guest speaker at the "Xiangshan Roundtable," shared his views on the cotton market and trading opportunities.

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President Huang Hongyu was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference

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