The G20 Meeting Is A Delaying Tactic. Sino US Trade And Cotton Textile Industry Are Still Under Pressure.

The two important events of the last weekend - the US cotton sowing area and the first meeting of the US dollar - are good for the international market, at least on the surface. The first meeting of the US dollar summit at the G20 summit made the market tense and emotional immediately released. Although the outcome of the meeting was somewhat unexpected among the market participants, cotton futures markets at home and abroad were unable to resist double inflation in early July 1st.

According to the results of the first meeting of the US dollar, the United States has promised not to impose new tariffs on Chinese goods, and the two sides will resume economic and trade consultations. The two countries' economic and trade teams will discuss specific issues, and even Trump will allow us companies to sell products to HUAWEI. Admittedly, this is the best result that the market can foresee, and the market has finally breathed a sigh of relief.

For China's cotton textile industry, although everything has not yet been finalized, at least tariffs can finally be temporarily ignored, and the vast majority of textiles and clothing can continue to be exported to the United States. In the short term, the textile industry may return to its original rhythm. It is still possible to win orders and continue to grab exports in the second half of this year. Without the introduction of new tariffs, confidence in domestic and foreign markets will be boosted. In the short term, China's textile and clothing export orders will be stable, and domestic cotton consumption may also increase.

Although the United States no longer imposed new tariffs on Chinese products, but how the tariff has been added, the meeting did not mention that the tariff of the US cotton 25% is still being levied, and whether it can be cancelled will depend on the later consultations. Therefore, the outcome of this meeting is not good for us cotton exports, and China will be cautious about signing the US cotton. At the same time, China's domestic business inventories and port's external cotton stocks are quite adequate. There will be no problems in cotton supply next year. There are no new changes in foreign fundamentals, Chen cotton and new cotton supply, so there will be no obvious changes in the import cotton market.

According to foreign media analysis, because cotton does not have the right to speak at the US government level of cotton, even though China promises to buy large quantities of US agricultural products, it can not guarantee that it will import American cotton. In fact, if there is no specific procurement agreement, China and the United States will repeat the pattern of postponing the purchase and postponing the purchase again, which is the same as last year's meeting in Argentina. Moreover, since the middle of May, the domestic textile industry chain has been hit hard, and it is hard to say how much the market can recover. As a result of this meeting, to a large extent, the Trump administration was under the pressure of all kinds of pressure. Compared with the previous six months, the confrontation between China and the United States has not changed at all and will remain for a long time. Therefore, Sino US economic and trade and cotton textile industry still face enormous challenges and pressures.

Before the Qingdao meeting, I was lucky to have communicated with editor in chief of the company. Although he believes that under the background of Sino US trade war, the market outlook and cotton price trend are unpredictable, he thinks cotton consumption has been growing. From a historical point of view, in 2008-2009 and 2010-2011 years, cotton consumption has recovered rapidly from the crisis two times, and the market downturn may not be long. The key is to see the outcome of Sino US negotiations. For those in the cotton market, it is more important to maintain such an attitude and confidence.