American Cotton Growers Are The Big Winners &Nbsp; Chinese Cotton Growers Do Not Increase Their Income.

"This price is soaring, the US.

In 2010, the US cotton planting area increased by 20%, the output increased by nearly 50%, and the price reached the highest level in 15 years.

In January 9, 2009, cotton contracts in ICE3 months were 49.32 cents a pound and 49.85 cents per pound in May cotton contracts.

In September 29, 2010, ICE12 cotton rose 1.0124 per pound, up 104%.

Meanwhile, American cotton growers enjoy the high subsidies provided by the US government, with a subsidy rate of up to 89%, or $100 per sale.

China's cotton growers have only 15 yuan seed subsidy per mu. At the same time, because of the increase in cotton production costs and the decline in output and quality, cotton farmers have not received any increase despite the soaring cotton prices.

"The amount of US cotton signed in advance is very large, and more than half of them have been sold out."

Dong Shuangwei said that in 2010, the cotton planting area in the United States increased by 20%, the output increased by nearly 50%, and the price reached the highest level in 15 years.

China, the United States, India and Pakistan are the four largest cotton producers in the world.

The United States is the largest exporter, while China is the largest importer and the largest customer in the United States.

According to the data released by the US Department of agriculture in August 12th, China's cotton import demand has increased by 24% since 1993.

In 2005, the world exported 8 million 80 thousand tons of cotton, and the United States accounted for 2 million 830 thousand tons, accounting for 35% of the world's cotton exports.

The International Cotton Advisory Committee (ICAC) predicts that in the year 2010, the world's cotton exports will be 8 million 460 thousand tons, and the United States will account for 3 million 220 thousand tons, reaching 39%.

2009 China has imported 2 million 505 thousand tons in the whole year, an increase of 73% over the same period last year.

Among them, 851 thousand and 200 tons were imported from the United States, accounting for 33.98%, 797 thousand and 700 tons of cotton imported from India accounted for 31.84%, 246 thousand and 700 Uzbekistan cotton, accounting for 9.85%, and 198 thousand and 700 tons of Australian cotton, accounting for 7.93%.

In the first 8 months of 2010, China imported 1 million 950 thousand tons of cotton, an increase of 1 times compared with the same period last year.

But in recent years, it has accounted for six or seven of total cotton imports, and the United States and India cotton have a gap.

The restrictive policy of India's cotton exports in 2010 made the international market especially the supply and demand of China tight.

To ensure the supply of raw materials for the domestic cotton textile industry, the India authorities have adopted export licensing restrictions on cotton since May 21, 2010.

However, the move was strongly opposed by importers from Pakistan and Bangladesh. They asked India cotton growers to carry out the signed cotton export contract, otherwise they would ask for payment of liquidated damages for the contract.

It is reported that Bangladesh is a major textile power country in South Asia. Annual textile exports account for about 80% of total exports. As the fourth largest cotton producer in Pakistan, cotton production has been reduced by nearly 380 thousand tons due to floods. From 2010 to 2011, at least 680 thousand tons of cotton will be imported.

In previous years, the cotton gap in China was only 2 million tons.

It is expected to have a gap of 3 million tons this year.

Dong Shuangwei said China's dependence on imported cotton, American cotton traders are looking at it, the possibility of the price reduction of the United States cotton is very small.

US Department of agriculture raises cotton prices

"In recent years, the highest output of cotton in China is less than 7 million tons, but the United States Department of agriculture has predicted that China's cotton output will be 7 million 180 thousand tons this year."

Dong Shuangwei said that the cotton boom, the United States Department of agriculture is the advantage of good rotation to introduce manipulation of the market to facilitate the speculation of hot money.

The United States Department of agriculture first set the profit margin, raised production expectations, narrowed the expected supply and demand ratio, lowered the cotton price expectation, and waited for the cotton to go public quickly.

In Dong Shuangwei's view, this method is similar to that of corn and soybean prices in the past few years.

On September 4th -12, before a surge in cotton prices, a delegation led by the national cotton Commission (CCI) visited China. During its visit to Beijing, members of the delegation listened to the reports of China Cotton Association, China National Textile and garment industry association and China textile.

Parke, vice president of CCI, said that one of the main objectives of the visit was to convey to Chinese cotton industry officials that the US cotton industry will continue to abide by its commitments and provide timely high-quality cotton.

"China is the largest customer of raw cotton in the United States, and we are committed to meeting the needs of Chinese customers, both in terms of quality and in time delivery," Parke said.

In August 12th, the US Department of Agriculture announced the monthly report on cotton supply and demand in August. It indicated that the inventory of cotton in the end of 2010/11 was reduced to 45 million 610 thousand bales at the end of the year (1 bales of 500 pounds), and 49 million 610 thousand packages in July, and cotton consumption increased from 119 million 700 thousand packages to 120 million 870 thousand packages.

Inventory reduces the subtle changes in supply and demand and boosts cotton futures bullish.

In August 12th, all kinds of funds purchased about 12000 hands of the US Intercontinental Exchange (ICE) cotton December bullish contracts.

According to the latest data from the US Commodity Futures Trading Commission (CFTC), as of August 10th, ICE2's cotton futures and options fund's net long positions surged 13019 (1 to 50000 pounds) compared with last week, and the net strength of speculative forces increased to 11330.

Dong Shuangwei said that because China's current statistics are lagging behind and opaque, although the trend of global cotton production is looking at China, prices do indeed focus on the United States.

"The United States has mastered the pricing power of cotton prices."

Lang Xianping said.

In his view, cotton is the same as soybeans and corn. It is the conspiracy of the United States.

We try to control inflation in China by controlling the three major agricultural products.

American cotton growers under high subsidies

In the context of continued global decline in planting area, this year the United States rose for the first time, and its planting area increased by 20% over last year.

Behind the rise of the cotton growing area in the United States is the US government's high subsidy to cotton growers.

The United States established the Cotton Subsidy Policy in the 1933 agriculture act. In 2002, the agricultural bill stipulates that production subsidies, sales subsidies and trade subsidies (i.e. export subsidies Step 2) and restrictive subsidies should be applied to cotton.

American cotton growers have signed the annual planting agreement with the US government, and have identified their basic planting area (the average planting area from 1998 to 2001) and the subsidy per unit area in the agreement.

The basic planting area and subsidy per unit area can be applied for subsidy after the government has approved it.

The current US agricultural law of 2002 stipulates that the subsidy rate of direct subsidy is 6.67 cents per pound.

The agricultural bill increased by 1.13 cents / pound compared with 1966.

Anti crisis subsidy is a production protective subsidy launched at the time when the effective price is lower than the target price. The target price is 72.40 cents / pound, which is the lowest protection price stipulated by the current agricultural law of the United States in 2002.

The US cotton sales subsidy means that cotton growers can use the cotton that has not been harvested as collateral to obtain a loan from the credit company.

After the sale of cotton, the loan and storage costs are paid in cash.

If the price is lower than the minimum protection price, the USDA compensates for its deficiency.

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2002 of the agricultural bill has raised the commodity loan rate (52 rate / lb), which is 0.08 cents higher than the 1996 bill.

In order to ensure the competitiveness of American cotton in the international market, and encourage the cotton textile enterprises in the United States to use more cotton trade subsidies, the subsidy is mainly for textile enterprises and cotton exporters.

Economists Lang Xianping's research shows that from 1999 -2003, the subsidy rate was as high as 89% and 2001-2002 years as high as 129%.

The United States subsidized 25 thousand cotton farmers every year for about 3 billion dollars, with an average subsidy of 12 thousand US dollars per household, equivalent to the output value of a Chinese cotton farmer from 7 to 10 years.

Compared with the United States protecting the domestic cotton industry in the form of law, China's cotton industry base is extremely fragile.

Cotton farmers in the United States are not worried about the sale of cotton. China's cotton growers are selling cotton to cotton producers and they need to face the enormous risks brought by market changes.

Compared with the high subsidies of cotton farmers in the United States, Chinese cotton farmers have only 15 yuan of subsidy per mu.

India, which is the same developing country as China, has also established the lowest supporting price of cotton and subsidized the cotton development project through the India Cotton Corp.

Pakistan set up the cotton protection price; Mexico implemented the support agriculture plan in 1994, subsidized the cotton growers for more than three years to subsidize 73 US dollars, and the plant protection health subsidy 129 US dollars.

"Cotton planting in the United States is a large-scale mechanized planting, while China is a decentralized plantation."

Feng Mengxiao, chief information officer of China cotton storage information center, said the cost of cotton planting in China is much higher than that in the United States.

US cotton growers borrow futures market guarantee insurance income

The US cotton futures pricing model based on futures exchanges has made the intercontinental Futures Exchange (ICE) in New York become the most important pricing center in the world.

In 1870, the New York cotton exchange was established, and cotton futures trading was launched in that year.

Over the past 130 years, 15 commodity exchanges have carried out cotton futures trading. Besides the New York Cotton Exchange (now known as the New York futures exchange, NYBOT), cotton futures exchanges are still ongoing, and cotton futures trading on the other 14 exchanges has ceased.

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In 2004, cotton futures landed on the Zhengzhou Mercantile Exchange, making it the second most widely traded cotton futures exchange in the world after ICE.

This is a move for China to strive for pricing power of international cotton prices.

Zhu Guohua, a famous expert in Futures Legislation and professor of Shanghai University of Finance and Economics, has pointed out that almost all cotton farmers and cotton traders are involved in futures trading in the United States.

Cotton growers form cotton farmers cooperatives and sell cotton to cotton farmers' cooperatives at harvest time.

The cotton farmers cooperatives participate in futures market hedging in their own name, so as to lock in the selling price and return to the farmers at the average price.

This has fundamentally solved the problem that cotton farmers can not preserve value because of their scale of production and capital size.

Cotton growers in China are basically insulated from cotton futures because they are scattered.

It is not possible to lock in price protection benefits.

In the boom of cotton futures, futures traders "got mad", but their interests had nothing to do with cotton growers in China.

No increase in China's cotton grower bull market

In September 30th, China cotton net seed cotton purchase reference price 4.7-5.2 yuan / Jin.

A lot more than last year.

But Chinese farmers are abandoning planting cotton.

As China's largest cotton producer in the world, cotton planting area has been losing step by step. In 2 years, the planting area has decreased by 14 million mu.

Henan is one of the main cotton producing areas in China. The cotton planting area in the whole province has reached 10 million mu at the most.

The official estimate of Henan's planting area is 6 million acres this year, while the industry's most pessimistic estimate is only 2 million ~300 mu.

However, according to the information from the cotton producers association of Shandong Dezhou supply and Marketing Association, the cotton planting intention in 2010 was reduced by more than 10% over the previous year.

Last year's high cotton prices did not stimulate farmers' enthusiasm for planting cotton. This year, the city's cotton area is only 1 million 550 thousand mu, down 32% from last year, to the lowest level in 11 years.

Due to the relatively good initial climate, it was estimated that the yield of seed cotton could reach 255 kg.

In the middle and upper part of August, a continuous large range of high intensity rainfall and cloudy weather occurred in the middle of August, which is extremely unfavorable to the growth of cotton in the bud stage. It is estimated that the cotton yield will be reduced by more than 20%, and the quality of cotton will also decrease significantly.

According to the average yield of 200 kg per mu, according to the average seed price of 8 yuan / kg, the output value of Mu is 1600 yuan, and the direct cost of planting is 383 yuan / mu (90 yuan for base fertilizer, 35 yuan for machine ploughing, 60 yuan for seed, 15 yuan for planting, 20 yuan for plastic film, 50 yuan for pesticide, 91 yuan for dressing and 50 yuan for irrigation).

The statistics of Xiantao Cotton Association also show that the cost of cotton growers is up to 5.1% on average this year.

The total cost of cotton production in Hami, Xinjiang is 12.30% higher than in 2010.

Despite the rise in cotton prices, cotton growers have not benefited significantly from the price rise as a result of integrated cotton production, quality decline and cost increase.

If China does not attach importance to subsidizing and supporting cotton farmers, China's dependence on foreign cotton will be further deepened.

China's cotton will also be controlled by the United States after the corn and soybean dust.

Dong Shuangwei is very concerned about this.

The United States is the world's largest exporter of agricultural products, and China is its largest importer.

Cotton, soybeans and corn are becoming the main products of the US trade with China.

In 2009, China's soybean imports reached 42 million 552 thousand tons, of which 21 million 809 thousand tons were imported from the United States, accounting for 51.3% of the total imports.

In 2009, the volume of soybean imports in China increased by 5 million tons over 2008.

The increase is equivalent to the amount of domestic soybeans kept in the Treasury in 2009.

On the one hand, a large number of us soybeans will enter the country, while the other side will not be able to sell domestic soybeans. Excessive imports will cause serious harm to domestic soybean.

Corn is also experiencing the same situation.

According to us statistics, China will import 1 million 200 thousand tons of corn from the United States this year.

Next year it may reach 5 million 800 thousand tons, and it will increase to 15 million tons by 2015.

The United States government implements high subsidies to agricultural products, plus the application of pgenic technology in the United States. The output is high and the cost is low.

China's domestic soybean and corn markets are basically controlled by the United States, and the United States has mastered the pricing power of soybeans and corn markets.

The cotton market is also facing a similar situation. The United States subsidized cotton growers up to 89%. The risk of cotton growers in the United States is small and the cost is relatively low.

Effective maintenance of stable production of cotton in the United States.

China's domestic cotton production area and output have been declining, and its dependence on imports of American cotton is growing.

As the largest cotton importer and importer in the world, domestic cotton will decline further without increasing policy incentives.

Unlike corn and soybeans, the price gap between domestic cotton supply and demand is increasing, once the United States fully grasps the pricing power of cotton.

Chinese textile enterprises have to face the situation of buying high priced American cotton.

At that time, two cotton textile enterprises outside China will also be under control.