The Crazy Cotton &Nbsp; The Control Of Ammunition Is Almost Exhausted.

2010 of the cotton market is doomed to endless waves.

As early as May this year, domestic cotton prices began to rise steadily.

After the new cotton scale started, cotton prices rose at an alarming rate, almost 100 yuan per ton per day.

Affected by the weather, the quality of cotton in the mainland has been greatly reduced this year. It is difficult to produce cotton grade three or more, and the textile enterprises use cotton to Xinjiang high-grade cotton.

Moreover, because of the rising labor costs, the RMB exchange rate changes and international trade protectionism and other uncertain factors, the development trend of the textile industry gradually warming up is likely to reverse at any time.

This scene can not help but recall the situation 6 years ago, cotton prices have experienced a sharp rise, then fell to the bottom.

Then again, will the crazy cotton market again this year?

Therefore, the experts and market participants who interviewed the Newsweek magazine held that the current state control of the market should prevent rush buying, hoarding of cotton and cotton farmers.

In addition, we need to make adequate preparations for market risks under high prices to prevent cotton prices.

Cotton prices hit new historical extremes

Since September 20th, China's cotton market prices and futures prices have set a new record in both history, of which futures prices have been hovering around 24000 yuan per ton after several times of trading.

"Outlook" Newsweek recently learned in the cotton producing area of southern Xinjiang that although the acquisition of cotton has not yet been launched in large scale, the "price war" has become more intense.

At present, the purchase price of Akesu has reached 12 yuan per kilogram, breaking through the historical extreme value of 10 yuan per kilogram in autumn 2003.

Due to the high concentration of private cotton enterprises, Akesu has become the hub for the sale of cotton in southern Xinjiang in the past few years. The price formed locally has become the weathervane of Xinjiang's cotton purchase price.

As cotton prices continue to rise, cotton processing enterprises and cotton traders in the main cotton growing areas of southern Xinjiang have launched price wars, competing to raise prices and rush for cotton harvest.

According to Tianshan, Akesu, Xinjiang

Price war not only increases the risk of local cotton business acquisition, but also brings huge financial pressure.

According to some cotton business enterprises, in the past year, 30 million yuan of funds could buy nearly 2800 tons of cotton at a time, and only more than 1400 tons could be received this year.

At present, the buyout enterprises in southern Xinjiang are facing the problem of shortage of funds in varying degrees.

Chen Shiwen, executive vice president of the Wenzhou chamber of Commerce in Akesu, told the reporter that at the moment, the acquisition of local enterprises mainly depends on their own funds and the deposit of their customers. Once the cotton purchase reaches its peak, tens of millions of yuan of funds will not be enough. Enterprises can only shorten the turnover time by speeding up the sales progress.

However, considering the limited capacity of Xinjiang railway's outbound pportation, it is inevitable that the difficulties in the pportation of foreign goods will be difficult to get back in time, and the enterprises will face greater financial pressure.

While many Cotton Traders complain bitterness due to high cotton prices, the frightening prices are more worrying for the local financial sector.

Due to frequent fluctuations in domestic cotton prices in recent years, agricultural banks and other state-owned commercial banks or the withdrawal of cotton acquisition, or tightening the size of credit funds, currently supporting the acquisition of cotton enterprises financial units only the Agricultural Development Bank and rural credit cooperatives.

Restricted by the scale of funds, the funds that enterprises can lend from the rural credit cooperatives are too few to meet the needs of the actual purchase. The Agricultural Bank which provides nearly 30 billion yuan of loans each year has become the main source of Xinjiang's cotton purchase funds.

At present, more than 70% of the cotton purchasing enterprises in Xinjiang from the Agricultural Development Bank are cotton ginning plants. Because these enterprises are old and heavily loaded, the ability to resist market risks is much weaker than that of private enterprises.

Even with such high capital risks, the Agricultural Development Bank has to give full support to the acquisition of these main channels.

In addition, as the fixed assets of every cotton purchasing enterprise from the agricultural development bank do not exceed 20 million yuan, it is often necessary to lend hundreds of millions of yuan to acquire funds to satisfy the operation. Under the condition of high cotton prices this year, the loans issued by the Agricultural Development Bank this year will face unprecedented security risks.

Faced with increasing risks, the Agricultural Development Bank of China recently decided to stop issuing cotton purchase loans.

Ding Xingui, director of the two branch of the Xinjiang branch of the Agricultural Development Bank, told the correspondents: "once the loan is released, it will aggravate the current price war; if it is postponed, it will also worry about the situation that the enterprises are losing money to cotton growers because of insufficient funds."

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The control of ammunition is almost exhausted.

In order to stabilize domestic cotton prices and solve the problem of shortage of raw materials in textile enterprises, China Chu cotton began selling state reserve cotton in early August this year, and planned to throw 600 thousand tons of cotton in two months.

But the sell-off did not stop the cotton price from rising. By the end of 9, the auction price of the national cotton store had even exceeded 21000 yuan per ton.

Shortly afterwards, in order to ease the tight supply of the market and curb the continuous rise in cotton prices, China Chu cotton once again sold 400 thousand tons of state reserve cotton.

Despite the continuous "move", the industry insiders interviewed by this reporter think the move has limited impact on the market.

According to Zhao Jianfa, head of the cotton and horse storage and pportation station in Heze, Shandong, after the first throw, there were less than 700 thousand tons of cotton stored by the state, which is not enough for domestic textile enterprises for 20 days.

Once again, the reserve cotton that the state can use is only about 200 thousand tons, which is almost impossible for the market to be affected.

According to China cotton trading market survey, as of mid September, China's large textile enterprises generally have less than 20 days of cotton stocks, and most of the small and medium-sized textile enterprises have run out of stock.

What worries textile companies is that at present, there is no imported cotton in the international market.

According to some textile enterprises with import quotas, the imported cotton can not be imported at a high price.

Even in the last two months of this year, it is impossible to hope to solve the raw material crisis of textile enterprises in China.

Liang Binjie, sales manager of the international cotton trader Lai Bao group (Shanghai) Co., Ltd., which is engaged in the import of cotton business, explained to the correspondents: "due to pport restrictions, foreign cotton will not be delivered to the bonded areas of our ports in large quantities until January next year.

In addition, the throughput capacity of the US ports is limited, and the shipment to China is basically in late March. "

This means that in the next 3 months, there will not be a large number of imported cotton in China.

According to Li Cheng, deputy general manager of cotton and hemp company of Xinjiang production and Construction Corps, the state reserve cotton is seriously insufficient under the condition that no cotton can be imported, which has caused panic in domestic textile enterprises.

What makes these textile enterprises nervous is that the new cotton short time that will be listed this year is also difficult to meet the needs of many enterprises.

In recent years, the quality of cotton in the the Yellow River River Basin and the Yangtze River Basin is becoming less and less. The raw materials for high-grade textile products for export and domestic sales mainly depend on Xinjiang cotton and imported cotton. However, due to the weather affected by disasters, Xinjiang cotton has to start at least by the end of October, and with the constraints of Xinjiang's pportation capacity, Xinjiang cotton has to go to textile enterprises at least to the end of November.

At present, all cotton producers in Xinjiang are waiting to buy cotton, not only from Zhejiang's Cotton Traders, but also from the mainland's textile enterprises.

Cotton reserves and imports are important means for China to control the market and stabilize cotton prices.

Now, these two methods have basically failed to play any role.

Tan Yanwen, a professor of South China Agricultural University who has paid attention to the domestic and foreign cotton market for a long time, told the reporter: "it is unrealistic to hope that our existing reserve system will control the market. Our current cotton reserves are limited, and this regulation and control method can not compete with the strong domestic and foreign market fluctuations."

Due to the lack of funds invested by the state in cotton reserves and the restriction of storage scale, the current scale of cotton reserves in China is limited.

After the liberalization of the cotton market in China, the total volume of the country's storage and storage is about 2700000 tons, while the total annual cotton consumption in China is more than 10 million tons.

Tan Yanwen said: "in the past two years, not only are we throwing away the reserves, but the impact of the purchase and storage on the market is very limited."

For example, in late August 2008 and the end of October, 1 million 300 thousand tons of cotton were collected and stored in China. However, judging from the effectiveness of the implementation, the number of purchases and storage did not reach the bottom line which affected the market supply and demand, although it slowed down cotton prices, but failed to control the situation of continued decline.

"High cotton price era" coming

Due to the frequent disaster weather in China this year, and the increase in production is hopeless, in the textile industry gradually warmer, domestic textile cotton demand gap further expanded.

According to the China Cotton Association survey, in August this year, the continuous hot weather in the Yangtze Valley and the heavy rainfall in the the Yellow River River Basin had caused a great impact on cotton quality and yield.

In addition, because of the postponed sowing date this year, the impact on cotton production in northern Xinjiang should not be underestimated.

Mao Shuchun, a researcher at the Cotton Research Institute of Chinese Academy of Agricultural Sciences, told the reporter: "the cotton production situation in the three cotton areas is not optimistic at the same time, which is extremely rare in history."

Owing to the fact that the sowing area of cotton is basically the same as that of the previous year, there are more adverse weather conditions during the growth period.

Ma Shuping, deputy director of the Ministry of agriculture, said recently: "even if there are no major disasters in 9 or 10 months, it will be difficult for cotton production in China to increase production."

According to statistics from the Ministry of agriculture, China's cotton planting area is 74 million mu this year, which is basically flat, and the total output is expected to be 6 million 400 thousand tons.

With the rapid development of the textile industry, the supply pressure of cotton in China is also increasing.

According to the Ministry of agriculture statistics, since the beginning of this century, the amount of cotton used in spinning in China has increased by 10% per year, while cotton production has increased by only 5.8% during the same period.

At present, the total amount of textile cotton in China is more than 10 million tons per year, while domestic output has been hovering around 7 million tons, and the gap between supply and demand has been increasing.

Especially since the second half of last year, China's textile industry has gradually bottomed out, textile exports have increased substantially, and demand for cotton has also increased.

According to the latest forecast data from the International Cotton Advisory Committee (ICAC), cotton production in China is less than 3 million 40 thousand tons of consumption in 2010/2011, and the gap is far greater than the two cotton year.

At present, the world's annual exports of cotton do not exceed 8 million tons, Turkey, Bangladesh, Vietnam and other countries each year the total amount of imports of cotton is about 5 million tons, the international market for China's cotton has less than 3 million tons.

This year, affected by floods, most cotton fields in Punjab and Sindh, Pakistan were flooded. Although the loss is temporarily unable to be counted, according to the International Cotton Advisory Committee, cotton production in Pakistan has been reduced by at least 15% this year.

To make up for the shortfall of at least 300 thousand tons of cotton caused by floods, Pakistan is bound to need to purchase in the international market, which reduces the quantity of cotton that can be imported into China.

In fact, the shortage of imported cotton in China's bonded area in the first half of this year indicates the supply and demand situation in the coming year.

Chen Tao, chairman of Louis Dafu Beijing Trading Co., Ltd. said: "in the past few years, no more than 100 thousand tons of cotton are stored at any time in the bonded area of China's coastal ports, but by July this year, no matter how high the bid is, they will not be able to buy it.

This means that by next July, the supply and demand situation of cotton in China will be more intense than this year. "

Because imported cotton is also difficult to fill the gap between supply and demand of cotton in China, some people believe that China may enter the "high cotton price period", and domestic cotton prices will remain high in the coming year, which will not only increase the pressure of textile enterprises, but also increase the difficulty of national regulation and control of the cotton market.