1. Cotton imports decrease year-on-year but increase month-on-month in Jul, 2020
In Jul 2020, Vietnam imported 121,100 tons of cotton, down 9.1% year-on-year and up 2.6% month-on-month. From Jan to Jul 2020, cotton imports totaled 899,900 tons, a decrease of 4.5% year-on-year.
2. U.S. cotton imports rise month-on-month
In Jul, US remained the major import origin, with a proportion of 68%, up from May and the same month of last year. Indian cotton import volumes also increased apparently in Jul, and proportion also climbed up apparently, to reach the second place. Brazilian cotton imports declined.
In Jul, the import of US cotton was 82,000 tons, up 2% year-on-year; Indian cotton was 11,100 tons, up 390% year-on-year; Brazilian cotton was 9,000 tons, down 31% year-on-year.
Operating rate of spinning mills in Vietnam continued to recover, to above 50%. Besides, the shipment date of Vietnamese cotton yarn began to rise in early Jul, but was slightly lower than the corresponding period of last year. On one hand, the end of lock-down and the slight recovery in demand have restored the inquiries and transactions for yarn mills. On the other hand, in mid-to-early Jul, the exchange rate of RMB against the US dollar appreciated sharply. Compared with the average order cost in June, the yarn prices have decreased to varying degrees. In Jul, ICE cotton futures market was strong, and Vietnamese mills continued to sell with discounts.
| Cotton imports of Vietnam and unit prices in Jul, 2020 | ||||
| Origins | Volumes (ton) | Yearly change | Unit price (cent/lb) | Yearly change |
| U.S. | 82,013 | 2% | 73.2 | -13% |
| India | 11,130 | 390% | 61.4 | -22% |
| Brazil | 9,031 | -31% | 73.9 | -13% |
| Australia | 8,383 | -19% | 81.3 | -9% |
| Cote d'ivoire | 2,152 | -50% | 68.4 | -18% |
| Argentina | 2,006 | 42% | 61.8 | -21% |
| Indonesia | 568 | -44% | 48.5 | 0% |
| South Korea | 260 | -53% | 63.7 | -9% |
| China | 176 | -62% | 92.7 | 11% |
| Pakistan | 50 | -93% | 58.6 | 8% |
| Other | 5,306 | -71% | 70 | -15% |
In Jul, the overall demand for the Vietnamese cotton textile market was not much different from that in Jun. However, under the background of higher ICE cotton futures (higher costs), most Vietnamese mills chose to sell at lower prices. Therefore, both carded and open-end cotton yarn sales are seen, but most of them are mainly purchased by regular customers. However, due to the high cost of cotton, Vietnam's spinning mills have suffered serious losses, and there is little room for further price cuts in the short term. Under the pressure of continuous accumulation of inventory, more spinning mills may have holiday later. Looking from the export sales of US cotton to Vietnam, the sales have declined in Jul. The accumulating yarn inventory and thin sales have influenced the purchasing willingness to US cotton. On the whole, despite of deficits, Vietnamese spinning mills see continual sales with price edge, but selling pressure is large with higher cotton yarn inventory. Currently, end-user demand remains weak, and prices are hard to rise. In short, spinning mills may show no strong intention to purchase cotton.
Source: ccfgroup.com