Domestic Cotton Market Is Not Optimistic.

This article will analyze the recent situation of China's cotton market and relevant policies promulgated by the state, in order to determine the future trend of the cotton market.

In recent years, cotton output in China was 6 million 300 thousand tons in 2004, 5 million 700 thousand tons in 2005, 6 million 500 thousand tons in 2006, and 7 million 600 thousand tons in 2007.

The survey showed that the cotton planting area in 2008 was relatively stable, but it was not as optimistic as expected.

However, in February -3, the state raised the lowest purchase price of rice and wheat for two consecutive times, and the lowest purchase price after raising the price, the rice increased by 9%-10% compared with 2007, and the wheat increased by 4%-7% compared with 2007.

After the minimum grain purchase price and the subsidy of agricultural and fine varieties have been raised, cotton growers must weigh the comparative benefits of grain and cotton.

Due to the current cost of cotton planting and income, the seed cotton income of next year may be less than that of grain crops. The cotton planting area in Shandong is expected to be reduced by 5% this year than in previous years.

According to the Hubei Provincial Department of agriculture, Hubei cotton growers were affected by the excessive increase in fertilizer prices this year. The input of fertilizer in cotton fields decreased. The area of cotton basal fertilizer only accounted for 74.66% of the cotton field area, 14.4% lower than that of last year, and the application area of various commercial fertilizers decreased by nearly 50%.

Experts say that the reduction of fertilization will inevitably affect the yield of cotton.

The main reason for slow sales is that textile enterprises are generally short of funds, compressing raw materials such as cotton and so on.

And cotton purchase funds have always been the weakness of China's cotton enterprises.

Every year around June, the agricultural development bank will refinance loans, which will also force some cotton enterprises to sell stocks and return cotton loans to farmers.

According to China's cotton net, the total output of Xinjiang cotton in 2007/08 is 2 million 720 thousand tons, and sales progress is 72.8%, compared with 81% in the same period last year.

Moreover, from May 28th to now, the spot price of cotton in Xinjiang has shown a general downward trend.

According to the insiders, the average purchase price of local cotton seed is about 3 yuan / kg when the new cotton comes into the market in 2007/08, and the cost is 13000 yuan / ton, plus the cost of storage, pportation and interest in the first few months. The actual cost has reached 13800 yuan / ton.

However, the existing large quantities of cotton in the territory must be sold out before the new cotton market in 2008/09, but the current sales situation is not optimistic. If this situation continues, and the competition of overseas cotton, the only measures that local cotton enterprises can take is to reduce prices.

A processing plant in Linying reflects that, because of the high cost of their acquisition, the processing cost, bank interest, warehousing cost and cotton weight loss will not be profitable even if the lint is sold to 14000 yuan / ton.

The processing cost of lint in Heze, Shandong is also around 14000 yuan / ton. Local processing enterprises say that if they are not sold now, the interest cost will increase by 150 yuan per ton per month. If they are stored for three months, they will cost more than 450 yuan per ton.