Weak Market Demand And Limited Storage, It Will Take Time For Cotton Prices To Get Out Of The Doldrums.

People in the industry generally believe that the introduction of the purchase and storage policy will help stabilize the recent decline in domestic cotton prices, protect the interests of cotton farmers, but also to a certain extent to ease the pressure on Xinjiang cotton business acquisition funds.

But the basic factors that affect the price of cotton are the cost of purchasing cotton and the digestibility of the textile enterprises.

At present, the market demand is still weak, and the quantity of the purchase and storage is limited, so it will not fundamentally affect the trend of cotton prices.

Last week, the China cotton reserve management company and the national cotton trading market issued the notice on the acquisition and storage of Xinjiang cotton in 2007, which once again brought warm winds to the continuously depressed cotton market. It is not difficult to read out the main thrust of solving the problem of selling cotton in Xinjiang.

However, judging from the cotton futures price of the Zhengzhou Mercantile Exchange in recent days, the impact of the new cotton policy on the cotton market is limited, and the price is still falling steadily.

The highest to the warehouse price is the standard grade (328 level) per ton by 13400 yuan (refers to the Xinjiang library point) and 13600 yuan (refers to the inland reservoir point), other grades of cotton purchase and storage price according to 3% grade difference, 1% length difference rate calculation.

The actual paction price is delivered to the designated warehouse warehouse of the China cotton storage company.

In order to support the reform of cotton quality inspection system, Xinjiang cotton, which is certified by notarization, is settled by net weight. The net settlement price is added to 400 yuan per ton on the basis of corresponding cotton price.

However, since the purchase and storage is limited to Xinjiang cotton and registered cotton enterprises in Xinjiang in 2007, the improvement effect on cotton enterprises in other regions will not be obvious.

Only 150 thousand tons of Xinjiang cotton purchase quantity, it is difficult to completely solve the current huge cotton inventory problem.

From the price point of view, the purchase and storage price of Xinjiang is 3 yuan cotton 13400 yuan / ton, which is the same as the actual price level of the current market. Therefore, the purchase and storage price itself is difficult to have a fundamental impact on the current low cotton prices.

It is understood that this year, China's textile industry is facing a series of unprecedented difficulties, such as the appreciation of the renminbi, the increase in production costs, the serious backlog of inventory, and so on.

This year, the total output of cotton in China is estimated to be 7 million 490 thousand tons, which is basically the same as last year's total output.

The relative abundance of domestic cotton resources has also brought great pressure to the cotton market.

In response to the sales difficulties of Xinjiang cotton, the Ministry of Finance issued a notice on cost subsidies for Xinjiang cotton in Xinjiang in June. It decided to grant 400 yuan per ton subsidy to Xinjiang cotton. In July, the Agricultural Development Bank issued the "China Agriculture Development Bank's grain and cotton marketing loan method", increased the loan support for the cotton circulation enterprises. At the end of July, the Ministry of Finance and the State Administration of Taxation issued a notice to raise the export tax rebate rate of most textiles and all garment products from 11% to 13%.

At present, domestic textile enterprises are in deep trouble and have limited capacity to purchase cotton. Therefore, the above policies fail to bring obvious reactions to the cotton market in the short term.

According to a survey conducted by China Cotton Association, cotton farmers generally hope that the purchase price of seed cotton will be higher than last year.

According to the investigation by relevant agencies, cotton planting cost of cotton growers increased by 135.7 yuan per mu in the first half of last year, an increase of 29.3% over the same period last year, and the annual cost is expected to reach 200 yuan per mu.

Cotton farmers in Hebei, Shandong and other places also reflected that because of the heavy rainfall and serious pests and diseases this year, the cost of using drugs alone was forty or fifty yuan more than that of last year.

Under high cost and high investment, if cotton growers want to maintain their income level last year, the only expectation is that this year's cotton purchase price can be raised.

At present, the weak market in the cotton market is far from the expected value of cotton growers.

According to the accounting of rolling mill, provisional purchase price of new flower is up to 2.7 yuan to 2.8 yuan / Jin, and the price fluctuation of cotton by-product has recently appeared again, which makes cotton seed price difficult to go up.

This price is far below the expected price of cotton growers, which adds to the cotton farmers' wait-and-see mentality.

It is reported that the local cotton farmers are not eager to sell new cotton at low prices, and each family has stored 100-600 Jin of new cotton.