The Period Of Cotton Inflation Is Temporarily &Nbsp, And The Listed Cotton Enterprises Are Uneven.

At the beginning of last week, the main contract of zhengmian futures was on the whole, and the positions were down. Then, Zheng cotton's position suffered a sharp drop. On Thursday, Zheng cotton was not affected by the overnight U.S. cotton limit. It was supported by the rise in domestic spot prices and achieved a substantial rise. Friday's Zhengzhou cotton main 1105 contract was a big shock all day, and a standard cross star crossed.

As of October 29th, Zheng cotton main contract closed 1105 yuan 27245 yuan / ton, when the week rose 8.35%.

In the face of high rise and short-term upward pressure, how will enterprises in the middle reaches of the production chain make good use of the risk management tool for hedging? What kind of enterprises are there for the soaring price of cotton?

In addition, some Futures Company cotton analysts were interviewed to hear their analysis of hedging of cotton enterprises.

The upstream cotton enterprises are more advantageous.

At the end of August this year, Zheng cotton broke through the previous platform, and then hit a record high.

But after reaching a record high of 27980 yuan / ton in October 26th, the highest price of the 3 trading days did not exceed the price of 27980 yuan / ton.

Beijing mid-term analyst Xu Jing told the Securities Daily reporters that at present Zheng cotton belongs to the short-term shock finishing. From the weekly chart, the 27000 line has certain pressure on the disk, but no reverse signal appears.

Xu Jing said that the major cotton producing areas in China have experienced low-temperature freezing, high temperature and drought disasters and continuous heavy rainfall since April, resulting in a reduction in total cotton production, resulting in tight supply of cotton, and the demand is still strong. The imbalance between supply and demand has led to a surge in cotton prices.

In addition, according to a person in the industry, this year, there are also a lot of venture capital involved in the speculation of cotton, which includes some foreign enterprises and Wenzhou's capital, they hoarded a large number of cotton, cotton to rise.

The above factors add up, triggering a chain reaction, causing the cotton to rise.

It is understood that the Shanghai and Shenzhen two listed companies engaged in cotton production are mainly new agricultural development (600359), the new race shares (600540).

Wang Junjun, a researcher at Huatai the Great Wall Futures Research Institute, thinks that the soaring price of cotton has great advantages for the listed companies that own their own cotton production base, such as new shares and new farmers.

Wang Junjun said that the semi annual report of new Sai shares revealed that although the price of cotton spinning and cotton products continued to rise steadily, lint and cotton yarn income accounted for nearly 80% of the company's total revenue.

And the main business only includes the acquisition of cotton processing listed companies benefit less, may also be due to large capital occupation, low return on capital and profits are affected, such as Dunhuang seed industry (600354).

In an interview with our reporter, one of the companies in the company told reporters that the company has been doing hedging for a long time. At present, it mainly focuses on zhengmian 1101 contract. When the price reaches 26000-27000 yuan / ton, then look at the price of zhengmian 1105, and sell the hedging in time.

Textile enterprises without raw materials channels

Hedging operation must be considered.

According to statistics, the listed companies in Shanghai and Shenzhen two are mainly engaged in the production of yarn dyed fabric, including Shandong Lu Tai, YOUNGOR (600177), Hubei Maya, black peony (600510), de cotton share and Xinye textile (002087).

Reporters interviewed learned that some companies are concerned about the trend of cotton futures, but the degree of participation in hedging is uneven. Most companies declined to disclose more details on the grounds that they were specific to the company's business secrets.

Wang Junjun pointed out that this year, the opening price of cotton purchase is relatively high, plus many loans are not yet in place, and the risks faced by such enterprises are relatively large.

And enterprises are most afraid of cost and profit fluctuations. Such risks are not easy to control.

Xu Jing said that the demand for cotton sets is more than that of cotton mills and textile mills. Downstream businesses such as garment factories generally have little demand.

It is understood that in the listed companies, Shandong Lu Tai owns a vertical production chain from cotton to clothing, and has a larger advantage in the industry.

Lu Tai, a branch manager, told reporters that because the company had cotton fields, it was certainly enough for its own use, and Lu Tai had also been paying great attention to hedging to achieve the balance between production and operation.

This reporter also learned that Shandong Lu Tai owns a cotton company in Xinjiang, mainly engaged in cotton production, lint and cotton by-products production, processing, marketing and production and sale of cotton yarn.

Wang Junjun analysis said that for cotton mills and manufacturers in the middle reaches of the cotton industry, the key is whether the enterprise has raw material channels, or has signed relevant agreements with cotton production enterprises, so that the cost of the upstream production chain can be locked.

Shandong Lu Tai has its own upstream channel, and can not even think too much about market circulation. Raw materials enterprises in its channels can digest themselves and consider not making hedging.

But if an enterprise has no upstream production channel, it should consider intervention hedging.

In addition, the company's semi annual report shows that Lu Tai is doing derivatives business such as forward settlement, forward purchase of foreign exchange, forward foreign exchange trading, and so on.

During the interview, a senior expert in the futures industry said that the risk of cotton market is always present. Enterprises should timely and appropriately carry out hedging. Hedging, as a tool for risk management of cotton enterprises, has been recognized by many enterprises. The key issue now arises from the determination and financial position of enterprises. As for decision-making and capital status, enterprises should make their own choices after recognizing the necessity of risk management.