What is the impact of new crown pneumonia on the cotton industry?

Before late January, I am afraid that no one would have expected the "black swan" of the new type of coronary pneumonia. Even if an outbreak was expected, the spread would be so fast that it would be a mistake. With the start of the national epidemic of prevention and control, the number of confirmed cases has continued to decline, and the cure rate has risen sharply. The panic in society, all walks of life and all industries has begun to recede. The cotton textile industry will also resume work in mid-to-February. Dawn of stopping, stabilizing and even rebounding.

So what are the impacts of the epidemic on the cotton industry? The author summarizes the following points:

First, the progress of cotton processing in and outside Xinjiang has slowed significantly around the Spring Festival, which has affected lint storage, public inspection, storage and sales;

Second, the cotton market has basically stopped due to various reasons such as warehouse pickup, vehicle transportation, and road restrictions. Except for electronic disks and reserve cotton wheels, the spot has remained deserted;

Third, the replenishment of raw materials such as cotton mills and middlemen will be delayed for 10-15 days (some provinces, enterprises or longer). Even if the downstream enterprises resume work, they still have to go through the application, review, and disinfection checkpoints;

Fourth, domestic and foreign cotton consumption is expected to be reduced in 2019/20, and domestic supply may exceed demand. From the feedback of some textile and cotton enterprises, the epidemic will not only lead to a significant decline in domestic cotton demand in the first half of 2020, but also the import of cotton yarns and grey fabrics by Chinese weaving enterprises to India, Pakistan, and Vietnam;

Fifth, for some cotton companies, repayment of loans in March or encountered difficulties. From the perspective of time, the processing enterprises and traders in Xinjiang mainly hedged in the CF2005 contract, and the delivery, settlement, and recovery of payment are "Wangmei quenches thirst." At present, regardless of the price of Zheng cotton or reserve cotton, the transaction price is attractive to the ginner. Insufficient, cotton companies' willingness to ship back money is relatively low;

The progress of Xinjiang cotton transfer to the mainland in June and February and the progress of sales and sales declined, mainly due to restrictions on shipping, capital, road closures, and epidemic prevention and control. According to statistics from relevant departments, road transport of cotton out of Xinjiang has basically stopped since January 31.