Large Cotton Traders "High Fever" Hoarding Cotton For Golden Opportunity.

In August 19th, a large cotton textile enterprise in Zhejiang revealed that the sales profit of cotton yarn was 10 times higher than that of last year, so that the high return that did not happen in ten years benefited from the soaring price of cotton and cotton yarn and the operation of buying cotton after buying cotton.

However, on the chain of the entire textile industry, the profit growth is only this link.

The above refers to the fact that the price pmission in the industrial chain has gradually weakened, and the closer the terminal enterprises are, the smaller the price increases.

According to China's cotton price index, the standard

However, the hoarding of cotton hype in big industry is only one of the causes of the sharp rise in cotton prices. 2009 cotton market supply and demand gap of 3 million -500 tons is considered to be the root cause of high cotton prices.

In order to stabilize the soaring cotton prices, the national development and Reform Commission has issued two cotton slip tax quotas in a row in recent months, and sold 600 thousand tons of reserve cotton in August.

large enterprises

The above cotton textile business people revealed that this year, the sales profit of 32 cotton yarn is generally 5000-6000 yuan / ton, which is considered by the industry to be the highest level in 10 years.

And in 2009, the sales profit of cotton yarn was only about 500-1000 yuan / ton, and the company only maintained its profit.

Quite a few of these gains have come from hoarding.

The source said that because cotton yarn and cotton prices continued to rise, businesses bought cotton hoarding at a lower price a few months ago. After months of processing, yarn sales or direct reselling can get a lot of money.

Stimulated by high returns, cotton textile enterprises have also reached a record high level this year.

According to the survey data of the cotton information network of the national cotton trading market, the average cotton inventory in cotton mills in the early August was nearly 38 days, although slightly lower than that in early July, but it still increased by more than 20% over the last three years.

Recent research by China Cotton Association also confirms this statement.

An industry warning issued recently by China Cotton Association has pointed out that "large and medium-sized enterprises are quite stocking at present, and some large textile enterprises have 6 months of cotton consumption."

In the past two years, the bad demand situation has made textile enterprises not dare to store cotton. With the use of buying as the industry's common practice, the amount of hoarding of large enterprises is even less than a month.

A person who does business consulting for several cotton spinning enterprises introduces that most of the cotton spinning enterprises are mostly hoarding cotton, while cotton yarn is mostly in the middle link of cotton yarn traders and distributors.

"The whole operation is nothing more than hoarding first, and then trying to raise the price."

He said that the scale of the required funds has made small cotton spinning enterprises unable to participate in the "feast".

In fact, since last year's selling of cotton reserves, the operation techniques of some large state-owned textile enterprises in Shandong have been controversial.

The above-mentioned consultants said that such large enterprises pushed prices up in the auction of cotton reserves, thereby affecting the spot price of the market, and then converting the cotton that had been purchased at a low price earlier.

The ongoing 600 thousand tons of cotton reserve auction, the paction price is basically around 18200-18300 yuan / ton, far higher than the government set the auction price of 16500 yuan / ton.

"In recent years, large cotton producers have basically taken away all the funds previously invested in real estate and used them for cotton speculation."

These people said that although the industry decided to take part in the cotton speculation or the capital in the industry, there were also some hot money in Zhejiang and other places, which intervened through some consulting firms in the industry.

At the beginning of this year, the Xinjiang Zhejiang chamber of Commerce estimated that at least 10 billion of Zhejiang's private capital withdrew from Shanxi coal mines and domestic real estate to Xinjiang cotton.

Du Yuzhou, vice president of the China Textile Industry Association and former textile industry department, mentioned this problem at the Cotton Industry Summit Forum in May this year. He said, "now some knitting factories have to consider building their own own mills. The limited funds of enterprises are not used for upgrading the industrial chain, but for dealing with the speculation of cotton and cotton yarn. This is a waste."

Cotton Subsidy Policy is not enough

Despite the hype, the number of people interviewed in the industry attributed the sharp rise in cotton prices to supply and demand.

Wang Qianjin, an analyst at the first textile network, said that the speculation of capital merely exacerbated the imbalance between supply and demand in the cotton market.

Gao Fang, Secretary General of the China Cotton Association, once analyzed that the cotton production estimated by the industry and government departments in this year (September 2009 -2010 August) is estimated at around 7 million tons, and the consumption estimate is around 9 million 500 thousand -1000 million tons.

The cotton shortfall of this year is about 3 million tons, which needs to be compensated by import or policy reserve.

In fact, the data of cotton supply and demand in China have been highly controversial, and the estimate of supply and demand gap ranges from 3 million tons to 5 million tons, but the fact that the 2009 cotton production is reduced year by year is a fact.

Ma Junkai, Secretary General of the Dezhou Cotton Association of Shandong, told reporters that cotton production in Dezhou area was nearly 30% in 2009 cotton year (compared with normal years). In addition to weather reasons, cotton farmers found that the income of cotton seed in these two years was not as good as planting wheat and corn, resulting in a reduction in cotton planting area.

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The survey just completed by Ma Junkai shows that when the new cotton comes into full market in October, if the purchase price of seed cotton can not exceed 3.7 yuan per catty, it means that the income of farmers in this year is still not as good as that of grain. Next year, the cotton planting area will continue to shrink.

Because cotton is included in cash crops and does not enjoy the market support policy of wheat, corn and other food crops, the minimum protection price policy for cotton farmers is also far from being expected.

Du Min, a researcher at the Ministry of agriculture's Rural Economic Research Center, said that in fact, China's accession to the WTO allowed China to implement less than 8.5% of the subsidy for cotton, which is estimated to be around 5 billion -60 billion yuan per year.

Unfortunately, this subsidy is far from enough. In 2009, for example, the government only invested a total of 1 billion 300 million yuan in cotton seed subsidy.

In order to stabilize cotton prices, the NDRC issued a total of 894 thousand tons of cotton quotas and 1 million tons of cotton tax quotas in May last year. In May and June, it issued 800 thousand tons of cotton tax quotas and 868 thousand tons of cotton tax quotas. The quota has exceeded 3 million 500 thousand tons this year.

However, a larger cotton textile enterprise in Guangdong said that even if the government increased the quota twice, it would be too late for the issuance to be issued until the international cotton price had been fired up. Only now, the price of imported cotton was only several hundred yuan cheaper than that of the domestic cotton.

Because of the US government's high subsidies on cotton in the United States, the cost of US cotton imports has been lower than domestic cotton prices.

Since August, the effect of policy throw and storage of 600 thousand tons of cotton is not obvious. Wang Qian said that under the condition that the market price of cotton prices is high and the funds are speculation, it is difficult to stabilize the current high price by 600 thousand tons of cotton reserves.