Analysis Of Cotton Market'S "Worry And Joy" Trend In The First Half Of 2010

2009/10 whole year

Market Review

The cotton spot market in January was relatively light, but the price of the spot market rose slightly after the replenishment of the textile industry before the end of the textile market, and the selling price of the lint fell at the end of the whole market. The price at the end of the month was basically maintained at 14900-15000 yuan per ton, which was basically unchanged compared with the end of last month.

As far as cotton business enterprises are concerned, due to the pressure of repayment of loans from some enterprises at the end of the year, they have to actively ship and return funds to repay loans.

In addition, domestic and foreign futures market continued to decline, cotton storage enterprises began to differentiate, part of the market is still optimistic about the future, cotton prices to be high; and the other part of the market risk is considered to increase, cotton enterprises have also taken measures to speed up sales.

In February, the cotton market reversed the downward trend in January. Before and after the Spring Festival, the domestic cotton market was also out of line with the rise of the international cotton market and spot prices. However, the cotton trade was generally relatively mild in the light of festivals.

As in the year round, the acquisition of cotton has been greatly reduced, and the amount of resources on the market has been further reduced.

As far as Shandong is concerned, by the end of February, the cotton seed sale rate in the whole province was around 90%, and the remaining resources were basically concentrated in the areas where cotton was used after the holidays. The acquisition work had stagnated for a week before the end of the holiday. Most of the enterprises had not yet acquired the stock after the end of the month, and the number of acquired enterprises was limited.

Entering the March, with the large scale start up of textile enterprises, the purchasing intention of cotton increased, the speed of Sinop cotton pportation was slow, and domestic cotton supply was temporarily tight.

In the same period, the international market prices continued to rise, driving domestic cotton prices to accelerate, up to around 1000 yuan.

In the the Yellow River Valley alone, the purchase price has also risen, driven by the selling price.

Although most cotton growers have been sold out and the price continues to rise, their confidence in the market has been enhanced. In addition, the cotton planting intention of cotton growers in some areas has increased slightly compared with that in February.

However, the state's support for grain has been further increased, the comparative efficiency of cotton is relatively low, the area recovery is limited, and the overall level is expected to increase slightly.

However, due to the low temperature in late March, frost and gale were also seen in some areas. In 2010, the emergence and emergence of cotton seedlings were later than usual, and the seedling condition would also be affected.

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In April, due to the further shrinkage of cotton purchase, it is still insisting that the acquisition and processing enterprises are becoming less and less. The purchase price of seed cotton has basically remained stable. The cottonseed price has changed a lot. The cotton seed purchase price at the end of the month has increased by 0.1 yuan per kilogram compared with the beginning of the month. The cottonseed price in most areas is about 1.5 yuan per kilogram, which is in sharp contrast with the soaring price of last month, and cotton yarn price has hardly moved in a month.

In April, the most influential factor in the cotton market came mainly from the two adjustments made by the government of India to the cotton export policy of the country, which increased the trend of the international cotton market.

In May, the average monthly price of grade 328 cotton was 16774 yuan / ton, an increase of 31.3% over the same period last year, and the growth rate was 3%.

Imports of 198 thousand tons of cotton, compared with April, a sharp decrease of 38.9%, an increase of 30.6% over the same period last year; import prices continued to rise, a new high, the average monthly 1786 US dollars / ton, up 1.8% compared with April, up 45% over the same period last year.

The price of raw materials processing was the highest, averaging 2234 US dollars / ton, down 44.1% from the previous month, followed by the import and export of bonded warehouses, with an average price of US $1811 / ton, up 2.5% from last month.

Since June, the main cotton producing areas in China are in good weather, with slight occurrence of pests and diseases. The low temperature during sowing period has offset the negative effects of cotton growth, but the picking period may still be delayed.

If the weather is normal, the cotton output per unit is expected to reach 90 kg / mu, an increase of 3% over the previous year.

With the rapid growth of textile production and export, the increase of cotton demand and the rise of cotton prices, in order to ensure the supply and maintain stable operation of the market, in June 25th, the state increased the import quota of 868 thousand tons of cotton slip tax, and the total quota of 3 million 600 thousand tons was issued this year. Following the further efforts to coordinate and arrange the new cotton distribution, the 2 million 800 thousand tons of Xinjiang cotton had been pported and 400 thousand tons increased by the end of June.

Conclusion: in the first half of 2010, China's cotton textile industry has achieved a good start under the influence of many uncertain factors in the face of complex and changeable economic situation at home and abroad. Most of the indicators have returned to the level before the financial crisis in 2008.

According to market forecasts, China's flood will lead to a reduction in cotton production by 5%-10%. About 30% cotton fields in Pakistan and other cotton producing areas are damaged.

Some large enterprises in the industry hoarding cotton speculation also led to a rise in cotton prices.

At present, the market is still used last year's cotton. In October this year, the new cotton market will stabilize cotton prices for the next few months.

However, because of the less domestic cotton output this year, the overall trend of cotton prices will continue to rise in the future.