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Cotton planting in the new year has been paid close attention to. The slow growth progress and the reduction in production in the new year have become the consensus of the market. Since the end of March, the cotton market has been in an upward channel. At the beginning of the month, stimulated by market rumors that Xinjiang's cotton stock was less than 2 million tons, the cotton market rose more sharply. According to the business agency commodity market analysis system, as of the 12th grade 3128 lint price in 17331 yuan/ton, up 6.57.

Inventory side: According to China Cotton Information Network, as of the end of April, Xinjiang's cotton commercial inventory was 3.37 million tons, of which 43 warehouses in Xinjiang had a turnover of 3.1 million tons of commercial cotton. At present, the commercial inventory data at the end of May has not been released. However, the authenticity of the rumors of tight inventory needs to be confirmed. Due to the improvement of consumption in the first half of the year, the amount of Xinjiang cotton coming out of Xinjiang this year is relatively large. The current inventory in Xinjiang is lower than that in previous years, but it should be higher than the rumored 2 million tons. The current need to pay attention to the upcoming release of domestic cotton commercial inventory data.

Supply side: According to agency statistics, this year's Xinjiang cotton production reduction may exceed market expectations. In July, the single output is also facing the uncertainty test of high temperature. In the context of further excess ginning capacity, the intensity of this year's rush harvest may be second only to 2021. In the medium and long term, the probability of cotton prices will maintain a strong trend.

International end: the macro atmosphere in early June is more relaxed, two consecutive weeks of U.S. cotton exports increased, the U.S. cotton market is more stable. The Federal Reserve will hold a monetary policy meeting on June 13-14. Judging from the forecasts of large market institutions, most of them are expected to suspend interest rate hikes in June and raise interest rates for the last time in July. In June, U.S. farmers increased their estimated global cotton production by 224000 tons, of which China decreased by 108000 tons and U.S. production increased by 217000 tons. Global consumption is estimated to increase by 167000 tons. The forecast data of supply and demand are within the expected range, and the price of US cotton is stable as a whole. As of the 9th, the settlement price of ICE cotton contract in July is 84.04 cents, up 0.56 cents from the end of last month.

On the demand side: the pure cotton yarn market rose with the rise of cotton price. The market performance was average. The cumulative increase of cotton yarn in this round was about 500 yuan/ton, but it was not as high as the increase of cost side. The immediate profit loss of spinning enterprises increased. At the same time, the turnover of pure cotton yarn continued to decline under the influence of the off-season market. From the downstream point of view, the price of raw materials steadily moved up, but the yarn end to undertake capacity is insufficient, spinning enterprises to purchase cautiously, cotton yarn finished product inventory accumulation, but still in a low position, enterprises have a strong willingness to support prices. Orders from weaving mills continue to diverge, orders from textile mills are still sustainable, but new orders are few, clothing orders continue to weaken, and the overall comprehensive start-up of weaving mills has declined slightly, which also limits the continued rise in cotton prices.

In May 2023, China's textile and clothing exports were 25.32 billion billion US dollars, down 13.12 per cent from the same period last year. From January to May 2023, my country's cumulative textile and apparel exports were US $118.203 billion, a year-on-year decrease of 5.26 percent, of which the cumulative textile exports were US $56.829 billion, a year-on-year decrease of 9.39 percent; the cumulative clothing exports were US $61.33 billion, a year-on-year decrease of 1.09 percent. From the perspective of industrial operation, China's textile and clothing export data decreased significantly in May, with the same month-on-month decline of 13.12 and 1.32, respectively, the current external demand market is still weak.

Aftermarket Forecast: Business Society analysts believe that the current shortage of cotton commercial stocks in Xinjiang warehouses has caused worries. Under the long-term support of the sharp drop in cotton production in Xinjiang in the new year and the expectation of seed cotton harvest, cotton prices will fluctuate in the short term, waiting for the commercial inventory data to prove false, and will continue to run strongly in the medium and long term, paying attention to downstream demand and industrial chain transmission.