Domestic Cotton Market Prices May Continue To Rise In The Second Half Of 2010

　　 In November 2008, the domestic market standard three cotton price was 10500 yuan / ton; in May 2009, the price was 12000 yuan / ton; before the Spring Festival this year, it was 15000 yuan / ton; and now in mid May 2010, the cotton price is 17000 yuan, and the actual transaction price is as high as 17500 yuan / ton.

The main factor in this round of cotton price rise is in China.

　　 cotton The price has bottomed up and the price has soared. The international cotton price has surged from more than 40 cents in November 2008 to the current 80 cents, nearly doubled. China is the largest cotton producer, importer and consumer in the world. It is also the largest exporter of textile and clothing. The main reason for this increase in cotton prices is in China. The following data can be explained:

First, the US Department of agriculture (USDA) report shows that China's total cotton output in 2007 and 2008 is 8 million tons, 2009 in 7 million 70 thousand tons, and 7 million 180 thousand tons in 2010. In terms of consumption, 2008 was 9 million 580 thousand tons, and 2009 was 10 million 340 thousand tons. It is expected to increase to 10 million 670 thousand tons in 10 years. What is the end of the global cotton inventory situation? In 2008, 13 million 750 thousand tons, 2009 city 11 million 480 thousand tons, is expected to 2010 year only 10 million 910 thousand tons, a sharp decline year by year. The international availability of resources has been reduced, but China's output has been declining, which needs to be compensated by increasing imports. Data show that China imported 1 million 520 thousand tons in 2008, and imported 2 million 170 thousand tons in 2009, and the number of imports increased to 2 million 500 thousand tons in 2010. Resource shortage is bound to result in price increases.

Second, according to customs statistics, in April, China exported $14 billion 500 million of textile and clothing, an increase of 20.54% over the same period, an increase of 16.44%. In 2010 1-4, textile and apparel exports totaled 53 billion 787 million US dollars, an increase of 15.57% over the same period last year. According to the National Bureau of statistics, the total retail sales of textile and apparel in 2010 were 189 billion 700 million yuan, up 2303% from the same period last year, according to the National Bureau of statistics. The continuous consumption of downstream products will undoubtedly provide sufficient impetus for the continuous rise of raw cotton prices.

Three months after this cotton year market situation

In the last three months of the cotton year (six or seven and August), cotton prices in the domestic market will remain at a high level and the trend is going up. The price of the standard grade three lint market will probably run in the range of 17000-18500 yuan / ton.

The supply of resources continues to be tight. At the end of April, in addition to the reserve cotton, there were 1 million tons of lint in Xinjiang and nearly 1 million tons of lint commercial stocks in the mainland. The original import quota of 1 million 900 thousand tons had been imported to 1 million 170 thousand tons by the end of April, and the remaining 800 thousand tons import quota was expected to use 500 thousand tons before the end of August. At the end of August, the resources could be about 3200000 tons. The majority of September cotton in the new cotton year should be purchased from the cotton in the previous year. According to the cotton consumption per ton of 850 thousand tons per month, there is at least a requirement of 3 million 800 thousand tons of cotton supply. There are still hundreds of thousands of tons of gap to be filled with the national reserve cotton. Therefore, the strain of resources is obvious.

In production, there is a hidden danger of pushing up the price of cotton. Although the purchase price of seed cotton has risen sharply this year and even exceeded most cotton growers' expectations, the high cotton price did not stimulate a significant increase in the new flower area. According to the latest survey data from the Ministry of agriculture, the new flower area increased slightly in the general cotton area of the Yangtze River basin, while the new flower area in Shandong, Hebei and other provinces in key cotton producing areas continued to decline, and the area of Xinjiang cotton field in the largest production area was also difficult to rise, and the possibility of reduction was large. The Xinjiang regiment planned to cut cotton, increase grain and increase fruit, and the country's total new flower area was basically slightly higher than that of last year. According to the total output of about 7100000 tons forecast by domestic and foreign organizations, the total consumption will be increased by nearly 400 thousand tons, the consumption prospect is worrying and the import will definitely increase. The existing state cotton reserves are less than 1 million 500 thousand tons. We must ensure that the risk of national cotton reserves is about 1 million tons. Therefore, it is difficult to replenish the market demand gap in the short term. Only one way to solve this problem is to solve some market demand by increasing market prices, and on the other hand, to guide cotton farmers to stabilize and appropriately increase the cotton area next year, so as to make the future cotton market price drop rationally.

In terms of consumption, exports and domestic demand continue to be hot. We have already listed the latest textile and clothing export and domestic sales data in China, which shows that although raw materials and product prices have risen substantially, the consumption channels still remain smooth, and sales of products increase steadily, both in the international market and in the domestic market. This stable upward trend can not be changed in two or three months.

On the other hand, there are also factors that can help to keep cotton prices positive and strong: India's second largest exporters restrict cotton exports and lower US cotton stocks in the largest exporters, China Imported Most of the increase will attract funds to buy commodities to intervene in commodity cotton futures and continue to push up international cotton prices. Unfavorable climatic factors during the new cotton production are easy to be hyped up to boost cotton prices.

Factors that inhibit the market price of cotton

The main points are as follows: first, the new flower area of the world has increased significantly, and the continuous rise in cotton prices has stimulated the increase of new flower planting area in almost all cotton producing countries except China. The new flower area in the United States has the largest increase. It is estimated that the total output of new flowers will increase from 2 million 650 thousand tons to 3 million 630 thousand tons this year, an increase of nearly 40%. The total output of new flowers in the world will increase by more than 10%. The huge increase of global resources will effectively alleviate the tension of supply and make the international cotton prices rational. At present, the price of cotton imported from China is lower than that of the national cotton price of several hundred yuan per ton, which has the effect of slowing down the rising speed of national cotton prices. Two, the macroeconomic regulation and control of the national policy will also restrict the increase of cotton prices or irrational excessive growth. In the early stage, cotton farmers could not recognize cotton seeds without being aware of it. Faced with difficulties in raising cotton prices in the face of rising market cotton prices, it was difficult to curb cotton prices, and worried that farmers would once again hurt farmers to bury bigger price risks for the subsequent cotton market. Hesitation was not a matter of fact. The NDRC made a clear statement to ensure the supply of domestic cotton and there would be no shortage. The state has been closely following the operation and development of the cotton market and made every effort to ensure the stability and smoothness of the domestic cotton and cotton textile consumption market and ensure its healthy development. However, these negative factors, either existence or potential, have limited influence on the price of the cotton market which continues to be strong at present, but the impact is not to be underestimated. {page_break}

New flower market price variables increase

The price of cotton market at the end of this year will continue to grow to a new cotton year in 2010 without any suspense. In the new cotton year, the total output of cotton in the world has increased significantly, and the tight supply and demand situation has been easing. The uncertain Chinese market factors still dominate the price trend of international cotton. For example, if the climate is suitable, the cotton harvest will accelerate, which may lead to the gradual weakening of domestic and foreign market prices. On the contrary, the climate is not good, the output is decreasing, the market is postponed, the market is postponed, the market price is easy to be pushed up in the short term, and the cotton price is kept running high for a longer time.

First of all, the new flower area is less than expected, becoming the inevitable prerequisite for the high price of the new flower. Therefore, to stabilize the cotton area, we must increase the income of cotton growers and improve the cotton planting intention. Under the present government subsidy, we must allow the cotton farmers to increase their income through the way of raising market prices and attract them to expand the area of cotton planted next year. Other methods are difficult to achieve. Secondly, the delay in planting new flowers will delay the listing time and intensify the resource shortage during the handover of new and old cotton. Owing to the generally low temperature in cotton growing areas in China this spring, the sowing time of new flowers has been postponed for 20-30 days. Cotton consumption in cotton mills has been about 400000 tons in the past half month. The market will be able to supply resources more tightly. The new flower will be postponed again. This will undoubtedly lead to more stringent procurement of cotton mills, or even rush to buy to guarantee production, thus triggering the possibility of a high price of new flowers. Thirdly, the new cotton price relationship basically establishes the new bottom line of cotton price in China. In the past two years, the state has continuously raised grain prices. Rice has been mentioned at 0.95 yuan / Jin line from 0.72 yuan / Jin, and the actual market price has exceeded 1 yuan / Jin. According to the customary minimum grain price index of 1 to 8, the price of the corresponding cotton market will rise from the original 13000 yuan / ton lint to the corresponding 16000 yuan / ton line, and the price increase will reach 3000 yuan / ton. It is not surprising that the price of new flowers hit 18000 yuan or even more than 19000 yuan / ton. Finally, the impact of the new cotton harvest and the increase in the total output and supply of the international market on the domestic market price. While we expect the price of new flowers to go up, we can not ignore the possibility of another situation: the price of new flowers has dropped somewhat, even down to 17000 yuan / ton. There are four main points for attention: first, the cotton harvest in the main producing areas, the good weather after autumn, the timely promotion of new flowers, and the decrease in market prices expected by the cotton growers. Two, the data that the domestic market is bullish and the number of cotton reserves is greater than expected is sold in the early stage of the market. These data are sold in principle in the early stage of the listing of Xinhua, and three is the synchronous fall of the domestic price of the international cotton prices. The four is the European debt crisis. At present, the impact is expanding. Although it has not yet affected the export consumption of textile and clothing in China, it is difficult to confirm how much the follow-up effect will be.

In short, based on the poor results of the new flower area in China, we can make a judgement that the domestic cotton market price may continue to run high in the latter part of this year. The actual operation of cotton prices in the future will often happen in many unpredictable situations. It is not that we can fully predict the accuracy. Only by following up the market, grasping the latest development and changes in the market, and timely correcting and adjusting the original prediction results, is the ultimate goal of our understanding of the market.