News from the American Cotton Shippers Association
As of the end of May 2020, China has only purchased 19% of the $170 billion worth of U.S. goods that would agreed upon in the Phase One Trade Agreement. This means that in order for China to uphold their end of the deal, they will need to purchase approximately $139 billion worth of goods by the end of the year.
On Tuesday, USDA will report the annual Acreage report and the seasonal Grain Stocks report. Reuters/Bloomberg have provided their expectations for both reports. They estimate that there will be approximately 13.2 million acres of cotton planted, but the estimate may range from 11.9 to 13.9 million acres.
The U.S. House of Representatives will likely pass a $1.5 trillion infrastructure bill. The picture below demonstrates how money would be allocated through The Moving Forward Act.
On June 25, the Commodity Futures Trading Commission (CFTC) held an open meeting. The link below provides the key takeaways from the meeting.
USDA/AMS announced today that beginning July 1, 2020, modifications will be made to the cotton and tobacco policy regarding Review and Rework for classifications originally designated with plastic extraneous matter. Three modifications were made. See link for details.
In August, China imported 651,522 bales (141,852 MT) of cotton, representing a decrease of 4% m/m, and an increase of 54% y/y. Imports from U.S. included 470,857 bales (102,517 MT), representing an increase of 5% m/m, and an increase of 543% y/y, accounted for 72% of the total. In 2020, Chinese cotton imports totaled 5,458,448 bales (1,188,437 MT) with a decrease of 17% y/y. U.S. cotton was ranked as the largest supplier with a total 2,266,329 bales (493,435 MT), accounting for 42% of total imports. The report (below) also provides information on other topics such as textile and apparel exports, the tensions between U.S. and China, and more.
This week, the National Cotton Council released their recommendations for COVID-19 assistance. In the document, NCC discusses the economic devastation that COVID-19 has had on the cotton industry, including details regarding cancellations in export sales and decrease in world consumption. NCC provided 3 recommendations that would support the segments of the cotton industry. The recommendations can be found using the link below.
This week, Mr. Sun Ruizhe, President of China National Textile and Apparel Council (CNTAC), wrote a letter to ACSA to discuss actions they are willing to take to promote contract performance from Chinese companies. The letter from CNTAC is provided below.
ACSA has been in communication with the China Cotton Association (CCA) regarding trade between United States and China. This week CCA provided ACSA with the latest on the Chinese cotton industry. WANG Jianhong, Vice President and Secretary General, also wrote ACSA a letter thanking us for our latest discussions regarding the United States and China’s cotton industry.
Click Here for CCA letter
Click Here for translated CCA letter
Click Here for Chinese cotton industry information
The International Textile Manufacturers Federation posted in its weekly newsletter that current orders continue to be down in the mist of the COVID-19 pandemic. They state that orders across all segments of the global textile value chain have fallen between 37%-46% depending on the segment. Visit the link below to see the full ITMF newsletter.
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