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Analysis: The Trend Of Rising Cotton Prices

2010/11/10 14:27:00 51

Zhengzhou commodity exchange, November 9th

Cotton futures

The main 1105 contract closed at 33005 yuan per ton, 425 yuan higher than the closing price of the previous trading day.

The seven departments of the national development and Reform Commission, the Ministry of agriculture and the Ministry of Railways issued a notice recently, pointing out that cotton prices rose unusually.

market risk

In addition, the government departments concerned in the cotton producing areas are required to strengthen the investigation of the leasing of social hot money or the acquisition and processing of cotton, and seriously investigate and punish illegal activities that disrupt market order and fail to fulfill quality obligations.

The departments concerned should strictly investigate and punish the acts of distributing price increases, malicious hoarding and driving up prices.

Market participants believe that high cotton prices have attracted considerable attention from the relevant departments of the state, demanding stable cotton prices and increasing the risk of cotton market policy in the future.

"Although the market already knows the notice of the NDRC, the market is worried that the regulators will introduce more measures, and the market mentality is unstable after the price reaches such a high level, which will cause the market to be so volatile in November 9th."

Relevant personages said in an interview with reporters.

Although the market has responded to the notice, analysts do not believe that regulatory measures can be carried out step by step.

"The rise in cotton prices is not caused by speculation alone," the official said. "The imbalance between supply and demand does exist.

Nervous

After rising prices, textile enterprises generally need to replenishment, and are eager to buy again.

Therefore, it is still necessary to observe the impact of measures on hot money on cotton prices.

Some experts also pointed out that the fight against idle capital can not fundamentally solve the problem of high cotton prices. It is also necessary to increase supply from the perspective of encouraging planting. Now the low income of farmers' cotton planting has led to a decline in enthusiasm, and it is more urgent to improve the subsidy policy for cotton farmers as soon as possible.

The demand of textile enterprises in China not only supported domestic prices, but also promoted the international cotton price. In November 8th, the ICE cotton futures of the Intercontinental Exchange reached a trading limit again, and the cotton futures contract in December had increased seven trading days.

Local analysts and traders think strong demand, especially from China's demand, supports the cotton market.

"The price of cotton in the international market can not be adjusted under the support of China's demand. It is expected that the price of domestic cotton will soon rise. All kinds of policy messages can only affect the price temporarily, but the trend is very difficult to change. Cotton price rise is still the general trend."