Since April, ICE cotton futu✔res have experienced signifα↑γicant volatility, and the cur♦$✔rent contract prices are flat orΩ∏€ slightly lower than ₽εthey were a month ago. Affγ>ected by China's announcement that ©©"±cotton was included in the tariff lis$>₹✔t, ICE futures plunged sharply on ¶∏April 4, and the next day it quickl✔♠y recovered and recovered andλ☆ lost its position. Curren α®☆tly, both the May and↔Ωδ₽ July contracts are around 83 cen∞×ts, and the December ÷÷contract is around 78 cents. In te₩'™rms of spot price, the ♥Ω©Coulter A index is general$¶δαly stable, fluctuating between 9 ™0-93 cents, China's spot p>λrice is slightly weaker, Ind☆∞δ₽ia S-6 is generally stable, export qu↑$otation is maintained at¥•∑☆ around 80 cents, Pakistan ♦∏spot price from 78 cents rose ®≈≈Ωto 84 cents and then fell back to 77©¥ cents.
Sino-US trade friction has added←↔ more uncertainty to the × •market. On April 3, USA r♣>£±eleased a tax increase list woδ rth $50 billion, exc≥εluding textile and apparel p✘∑roducts. On April 4th, China also is§sued a tax increase list worthγ≈ 50 billion US dollars inc£✔∞luding cotton. Currently, →®∞the USA is working on a tax ₩≈σincrease list with a total valu↔®€§e of $100 billion. Whether th♠€✔₩e future will be impleφ±☆→mented is still in an unknown state. N→₩egotiations in the coming m™☆★onths will determine whether or n←₩•¥ot to actually increase t φ<₩axes. If implemented, it wiσ₽∞↔ll have an impact on the trade pattern↓.
One of the consequences is th÷€ at imported USA cotton is more ♥₽expensive than other cot♣¥☆αton because of the 2↑∏★5% tariff, so China's im€π♥ports of US cotton will decline. How•↕ ₩ever, compared with a few years ago≤α, the US cotton impo≤↑rts caused by the increase in tar♥™iffs will not fall t'→♥★oo much. One reason is that↑≤→ China has significantly reduced♦₩ ε cotton imports in recent yγ♦₽ ears. In the past two yea♦<πrs, China's US cotton imports rang☆Ω ±ed from 900,000 bales to 2✘ φ.3 million bales, far belδ÷✔ow the long-term historical average↔ of more than 4 million bales. Since the export volume of U↓σ S cotton to China is already very low, ∏↔↑←the decline in its export volume wi≠↔×ll be much lower than a fe≤≤±w years ago.
Although US cotton exports to Chλ≥ ♥ina have declined, exp§←←orts to other marketαs will increase, espeΩ₩α¶cially in Vietnam and α≠$other Southeast Asian count♥ries. Last year, the shipments of Uπ♦♣βSA reached a record ε★÷ high, while exports to China §₩ ♥accounted for only US c←↓otton exports. 15% of ♦≥'the volume (far lowe→★÷✔r than the previous 30-60%), which m γ∑eans that 85% of the©≈ US cotton is now export→↔∑©ed abroad. Compared wi"α↔th 5-10 years ago, Chi'&₽na’s demand for US cotton is→Ω∞ in a downturn.
Despite this, the importance of China to US cotton and other varietie← s of cotton is not undere→≠"stimated. At present, China's reserve ≤♣πcotton stocks have falleδ ↓ n sharply, and China i€®s approaching a turni ↕¶ng point in the shar✘ p import of cotton. Th×₩∏e market's expectation that China's imp♣≈φorts will return to 10-15 mil""αlion bales will boos≥<'t the confidence of cotton expor≠ ←€ters.
If the proposed tariff increase is★™ ' implemented as China's cotton i₹$mports increase, it will affect the ≥export of USA cotton to Ch←<¶ina. However, the expor§∏♠t volume of cotton from other produc ♦ing areas is not comparable to that∑λ of US cotton. Therefβ ←ore, if China imports cotton €α←×from other countries, the supply of$© other exporting countries will¶π be short, and the export volume of ♣ US cotton to China will Ω₹be pushed up.