Cotton spot is now reduced rail freight

Recently, some cotton companies and operators in Xinjiang reported that although the number of small and medium-sized cotton mills inquired has increased, the quality requirements for lint cotton are not high (28mm or more in length, 28CN or more in strength, and 5.2 or less in horse value) However, most cotton textile companies put forward the requirement of “delivery to factory, cash on delivery”, which is difficult for cotton companies, especially for cotton enterprises that use agricultural issues, credit unions and other commercial banks. Since the cotton must be paid off in full by the supervision bank, the cotton enterprises generally require cash in and out of the regulatory warehouses in Xinjiang, do not owe, and do not accept the acceptance of ** or domestic letters of credit.

A Kesu cotton enterprise stated that since mid-to late-March, some customers, such as South Jiangsu, Henan, and Hubei, had contacted goods, and the price given was higher than the market price of 100-150 yuan/ton. However, the seller’s gas was required to deliver the goods to the factory. Without paying the deposit, the cotton company considered the risk to be too large to accept the "cash on delivery" condition.

Recently, some cotton-related enterprises reported that they received a notice from the Freight Department of the Urumqi Railway Bureau. The cotton freight rate was reduced by 30%. The cotton storage bases in southern Xinjiang's Aksu, Bachu and other places also indicated that they were notified by the Railway Bureau that they would be ready by the end of March. The price of cotton transportation is adjusted, but it is expected that the downward adjustment will not be as large as 30%.

After the Spring Festival, the export price of cotton from Xinjiang was reduced. The cost of direct shipment from the warehouse to the cotton mills in the Mainland was slightly higher than that of the rail transport (including the vehicular sales agent, the Mainland's warehouse loading and unloading fees, storage fees, etc.) 50-100 yuan/year. Ton even flat, rail freight was forced to lower. In addition, the focus of this rail freight tariff reduction is on coal, metallurgical energy, and other industries, and according to the “Notice on Promoting Railway Supply Side Reform to Deepen Spot Logistics Recommendations” issued by the China Railway Administration, the freight rates of all railway administrations are independently adjusted downwards. The rate has been expanded from the current 15% to 30%, and it has only been reduced by 15%. In any case, the reduction in the out-of-bound costs of cotton rail transport is a real positive for cotton and cotton textile companies inside and outside Xinjiang.