Imported cotton price trend review in 2024

In 2024, the international spot cotton prices (in local market, in USD) have been primarily a downward fluctuation. Notably, Pakistani and Indian cotton prices were relatively strong, mainly due to the decline in both planting area and production in these two major producing countries. In contrast, Brazilian cotton has faced the most "bleak" situation; on one hand, years of bumper harvests and insufficient cotton storage facilities, along with port capacity issues, have weakened sellers' pricing power. On the other hand, the depreciation of the Brazilian real against the US dollar has also been a significant factor in the continued decline of Brazilian cotton prices in USD. US cotton also faced two major challenges: the first was the gradual decrease in demand from China, which severely suppressed ICE cotton futures market; the second was the strong US dollar, which hindered US cotton exports, despite a bright demand performance in Southeast Asia.

Looking from the foreign cotton prices under shipment, the overall fluctuations have also followed the declining trend of ICE cotton futures. However, the price trend was mainly range-bound overall after declining to a low level in Jun. This indicated that international cotton traders did not hold a particularly pessimistic view of future cotton prices, as they have managed to maintain the overall offers within a small range of fluctuations through actions such as adjusting the basis, rather than allowing it to continue declining like ICE cotton futures.

In terms of the RMB spot imported cotton (cleared foreign cotton), the fourth quarter's tight quotas, the decline in imported cotton volumes, and the significantly lower quantity of sliding-scale duty quotas announced at the end of July have all had a multifaceted impact. Aside from the relatively sluggish performance of Indian cotton prices, other varieties, especially high-quality US and Australian cotton, have seen a significant increase in basis. During certain periods when ICE cotton reached low levels, some companies even engaged in stockpiling. By the end of 2024, the basis for high-quality cotton remained high.