Market Observation: Textile And Clothing Exports Decline, Cotton Prices Will Fluctuate Within A Certain Range

In February, the Spring Festival holiday superimposed on the US tariff increase on Chinese goods, textile and clothing exports fell month on month. At the International Textile Fabric Exhibition held in Shanghai in March, customers made more inquiries and placed fewer orders, and textile and clothing export orders, especially orders for pure cotton products, decreased significantly.

According to the data from the General Administration of Customs, China's export of textiles and clothing in February was US $12.94 billion, down 26.4% year on year and 56.8% month on month. Among them, cotton clothing reached 1.11 billion US dollars, down 33% year on year and 53.9% month on month. Exports to the United States were 220 million dollars, down 14.3% year on year and 58% month on month; Exports to countries along the Belt and Road reached 500 million US dollars, down 42.4% year on year and 53.1% month on month.

From January to February 2025, China's textile and clothing exports totaled US $42.884 billion, down 4.5% year on year In the first six months of 2024, China's textile and clothing exports totaled US $146.4 billion, up 2.9% year on year. In March, the United States again imposed tariffs on Chinese goods. It is estimated that there is a possibility of further tariff increase in the future, which will further affect China's textile and clothing exports.

In February, the domestic cotton supply was abundant. In addition to the high base in the same period last year, the cotton import volume in that month decreased significantly month on month and year on year. According to the General Administration of Customs, China imported 120000 tons of cotton in February, down 60.9% year on year and 20% month on month. Among the import source countries, Brazilian cotton accounts for 58.5%, American cotton accounts for 20.8%, and Turkish cotton accounts for 9%. Among all trade modes, the logistics goods in special customs supervision areas ranked first, accounting for 36%. In the first six months of 2024/25, China imported 732000 tons of cotton, down 57.8% year on year. On March 4, the Tariff Commission of the State Council announced that 15% tariff would be imposed on American cotton from March 10, 2025. It is expected that the volume and proportion of American cotton imports will continue to decline in the later period.

In February, the national new cotton processing work was basically completed. At present, the cotton sales progress in southern Xinjiang is 70-80%, and that in northern Xinjiang is 50-60%. Most of the cotton is concentrated in the hands of traders. As textile enterprises continue to purchase raw materials, commercial inventory shows a slow decline trend, but it is still relatively high compared with previous years. Due to the slow recovery of domestic consumption, textile enterprises are cautious in purchasing cotton, and the inventory of cotton industry decreases slightly month on month. By the end of February, the commercial inventory of cotton nationwide had reached 5.515 million tons, an increase of 148000 tons year-on-year and a decrease of 232000 tons month on month. The cotton industrial inventory of textile enterprises in the warehouse was 931000 tons, an increase of 43000 tons year on year and a decrease of 49000 tons month on month.

In February, the country released a positive signal that it would introduce a series of measures to boost consumption, which effectively improved the confidence of enterprises. At the same time, in the traditional peak season in March, the rigid demand for cotton in the market was further activated, and the domestic cotton price showed an upward trend under the joint promotion of various factors Internationally, affected by the decline in the area of American cotton planting intention and the increased uncertainty brought by the new tariff policy of the United States, international cotton prices rose first and then fell, with a weaker trend than domestic cotton prices, and the gap between domestic and foreign cotton prices widened. China Cotton Price Index (CCIndex 3128B) monthly average price was 14899 yuan/ton, down 2208 yuan year on year and up 178 yuan month on month; Cotlook The monthly average price of A index was 78 cents/pound, down 21.7% year on year, and the month on month ratio was flat. The tariff price of 1% was 13813 yuan/ton, lower than the domestic cotton price of 1086 yuan, and the price difference was 204 yuan larger than that of last month.

On March 19, the China Cotton Association held the second council of the fifth session of the China Cotton Association and the National Cotton Situation Analysis Meeting in Zouping, Shandong Province. The meeting summarized the new cotton purchase situation in 2024, analyzed the new cotton production situation, cotton and textile purchase and sales situation, and put forward suggestions on the new round of target price policies and macro-control policies. The participants believed that the domestic cotton supply in 2024/25 was generally loose, the domestic demand in the textile industry was weak, the export was blocked, and the orders were less than expected. The uncertainty of the future foreign trade environment increased. The recovery of domestic consumption still needs further observation, and the cotton price will fluctuate within a certain range.