Industry Observation: The Decline Of Domestic Textile And Clothing Exports Slowed Down

 

　　 （1） The supply is generally sufficient at the beginning of the new year

The old cotton has basically been delivered to the warehouse, and policy cotton has been supplied continuously. By the end of August 2023, the sales of cotton in the national cotton processing enterprises in 2022/23 had been basically completed, in sharp contrast to the high inventory of 1.81 million tons of old cotton in the previous year. In order to meet the cotton demand of textile mills, the central reserve cotton has been rotating out of the supply market since the end of July. From July 31 to September 14, 2023, the cumulative listing volume of reserve cotton is 448100 tons, and the cumulative actual transaction volume is 435400 tons, with a transaction rate of 97.17% and an average transaction price of 17675 yuan/ton. In the same period, the average price of the national cotton price B index representing the standard lint market price in the mainland is 18042 yuan/ton. According to the China Cotton Association, 750000 tons of cotton import sliding tax quota has been assigned to cotton mills. During the purchase of new cotton, relevant departments will continue to sell reserve cotton according to the situation, which will help the cotton market run smoothly.

Cotton will be listed sporadically in the new year, and the scale of picking is expected to be postponed. At present, cotton is at the late stage of flower and boll growth, and cotton bolls are opening more quickly. In some areas, sporadic picking begins, and the large-scale picking may take place in the first half of October. According to the survey conducted by the National Cotton Market Monitoring System at the end of August, the recent national weather conditions are basically normal, cotton is growing well, and pests and diseases are relatively light. The Yangtze River Basin and the Yellow River Basin are growing better than last year, and the unit yield is expected to increase. The cotton growth in Xinjiang is also better than the previous period. It is estimated that the domestic cotton output in the new year will be 6.05 million tons, 130000 tons higher than the June estimate. According to the survey conducted by China Cotton Network in early September, most respondents believe that the opening price of Xinjiang machine-made cotton is 7.6-9 yuan/kg. The correction of domestic cotton prices in the past two weeks has led cotton farmers to slightly lower their expectations of seed cotton purchase prices. Since the middle of September, the national temperature has declined. Whether the frost season is normal this year has become the focus of the market.

　　 （2） With the arrival of the peak season of textile production, demand has picked up slightly

Textile consumption recovered slightly, and the production and sales rate of gauze increased. In the peak season of traditional textile production, the downstream textile consumption demand slowly recovered, the orders improved relative to the previous period, the enterprise production enthusiasm was high, and the raw cotton inventory increased, but the overall domestic and foreign demand orders were less than expected. According to the survey of the national cotton market monitoring system, by the beginning of September 2023, the start-up rate of the sampled enterprises was 90.3%, up 3.4 percentage points month on month and 16.2 percentage points year on year. The yarn production and sales rate was 96.7%, 6.6 percentage points higher than the previous month; The production and marketing rate of cloth was 101.6%, 5.7 percentage points higher than that of the previous month. The average number of days for the cotton inventory of the sampled enterprises was about 28.3 days, an increase of 3.2 days month on month and a decrease of 2.1 days year on year.

Domestic sales of textiles and clothing increased slightly, while export decline narrowed. According to the data of the National Bureau of Statistics, the sales of clothing, shoes, hats, needles and textiles above the designated size in August reached 98.2 billion yuan, up 4.5% year on year and 2.1% month on month. According to the data from the General Administration of Customs, China's textile and clothing exports continued to decline year on year and the decline narrowed month on month in August due to factors such as low base and fluctuations in the RMB exchange rate. In August, China's textile and clothing exports amounted to US $27.862 billion, down 10.2% year on year, with a decrease of 8 percentage points month on month, of which the decline of textile and clothing exports was 6.3% and 12.7%, respectively, with a decrease of 11 and 6 percentage points month on month, stopping the trend of expanding the decline for two consecutive months.

　　 （3） Forecast of China's cotton production, sales and stock in 2023

Based on relevant special investigations and analysis of economic environment and market conditions at home and abroad, the national cotton market monitoring system forecasts China's cotton production, sales and stock in 2022 and 2023 as follows:

In 2022, the beginning inventory of Chinese cotton will be 5.29 million tons, the output will be 6.719 million tons, the import will be 1.4 million tons, the consumption will be 7.7 million tons, the export will be adjusted to 17000 tons, the ending inventory will be adjusted to 5.69 million tons, and the inventory consumption ratio will be adjusted to 73.73%.

In 2023, China's cotton initial inventory will be adjusted to 5.69 million tons, up 7.6% year on year; The output was 6.05 million tons, down 10.0% year on year; The import volume was 1.7 million tons, up 21.4% year on year; Consumption was 7.8 million tons, up 1.3% year on year; The export volume was 20000 tons, up 17.6% year on year; The ending inventory was adjusted to 5.62 million tons, down 1.2% year on year; The inventory consumption ratio was adjusted to 71.86%, down 1.87 percentage points from the previous year.

　　 Main conclusions

Entering the peak production season of "golden nine and silver ten" for textile and clothing, both domestic and foreign markets showed signs of marginal improvement, but compared with previous years, "quality" was insufficient. The price difference between yarn and cotton remains low, and the spinning production losses are common, which puts pressure on cotton purchase demand. Under the high expectation of consumption recovery in the early market, traders are actively hoarding goods, and yarn inventory has increased significantly. On the other hand, since September, the rainfall in some parts of China has cooled down, and the industry's concern about cotton boll opening and new cotton yield has increased. The drought and lack of rain in other major cotton producing countries have not been effectively alleviated, and the disturbance of weather factors on the supply side will continue. After the National Day holiday, China will usher in the peak of large-scale picking of new cotton. Cotton farmers generally expect a high purchase price of new cotton. With the promotion and purchase period of mechanized picking shortened significantly, the rush to harvest is inevitable. However, the last year's rush to harvest losses and the strengthening of regulation and supervision by relevant departments will promote more rational purchase activities. On the premise that the weather and rush harvest have not been falsified, it is expected that the domestic cotton price may still be slightly strong and volatile after the periodic pressure consolidation. Attention should be paid to the demand support after the harvest is completed.