Tongzhou Cotton Market Brief, 3rd week of April 2023

I. China Cotton
(I) Positive Factors
1) On April 14, the National Development and Reform Commission issued the "Notice on Improving the Implementation Measures of the Cotton Target Price Policy," which stipulates that subsidies will be provided for Xinjiang cotton based on a fixed output of 5.1 million tons. This policy, by specifying the subsidized output, leads to a decrease in actual subsidies for cotton farmers on the one hand, and has implications for output guidance on the other.
2) Export performance has exceeded expectations, improving market confidence. The year-on-year growth rate of textile and garment exports in March was 20%.
3) It is understood that the enthusiasm for Xinjiang cotton ginneries to contract for the new year remains high, and the contracting fees have increased.
(II) Negative Factors
1) According to downstream research, cotton yarn traders' inventories in Guangdong are currently nearing full capacity, and signs of weakening downstream demand have emerged.
2) At the end of March, commercial cotton inventories were 5.07 million tons, the highest level in nearly eight years, and supply-side pressure still exists.
3) This year's China cotton inventory-sales ratio is 108%, 9 percentage points higher than the five-year average, and the loose fundamentals do not support an unexpected rise in cotton prices.
II. US Cotton
(I) Positive Factors
1) The market currently expects that the Federal Reserve's interest rate hike in May will be the last, and macroeconomic policies will gradually ease after May.
2) This year's US cotton shipments of upland cotton totaled 75,900 tons, an increase of 34% from the previous week, with a shipment progress of 62%, which is relatively fast.
3) It is estimated that the planting cost for the new year will increase by 7 cents/pound to 78 cents/pound.
(II) Negative Factors
1) The Federal Reserve is currently facing an extremely high interest rate level of 5%, which has significantly suppressed economic activity. The PMI in March fell to 46.3%, increasing the probability of a future US recession.
2) Drought conditions in Texas improved week-on-week, with the Texas severe drought index falling from 45 to 38.
3) The proportion of funds holding long positions in US cotton remains negative, and funds do not consider cotton as an over-allocated commodity.
 
Focus: Xinjiang planting progress

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Tongzhou Cotton Market Brief, Week 4 of April 2023

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Tongzhou Cotton Market Brief, Week 2 of April 2023

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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