Cotton Rises Or Falls &Nbsp; &Nbsp; Cotton Growers Are Burning With Anxiety.

"At the time when the cotton price was the highest, 7 yuan, 2 wool and one jin (seed cotton), and those Cotton Traders wanted to rush, I did not sell. I thought the price might rise again. But now, the price has dropped to more than 5 yuan. Instead of cotton traders," cotton farmers in Linxi village, Linxi, Xingtai, are worried.

As at 15 on November 22nd, the CF109 of cotton futures of Zhengzhou merchants fell 1360 points from the opening date of the day, closing at 25770 points, which has been a continuous decline since November 11th.

Cotton prices have been rising for a long time since the beginning of this year, especially after September.

In November 11th, China's cotton price 328 index reached an all-time high of 31302, but since then, the index has fallen all the way, and only a few days later, the 19 daily newspaper closed at 28646.

Cotton prices seem to have been on the roller coaster for a short time. After soaring to the highest level in the short term, they suddenly turn around and leave countless confusion to those waiting for sale.

Confusion of supply and demand

In November 22nd, the head of a large textile enterprise in Shandong told reporters that they had continuously lowered the purchase price of cotton. Today, the purchase price of high-grade lint is 3 yuan, the price is 27500 yuan / ton, the 4 grade price is 27100 yuan / ton, and the price of each ton is reduced by 800 yuan compared with November 18th.

The small processing plant near Hui village has stopped buying now.

According to Yu Hui, these small processing factories rush to the countryside when prices are high, but they have begun to wait and see when prices have fallen over the past few days.

"The general business is rising or falling, these days have been carried over, and do not care about these days."

The enterprise director said.

In the wait-and-see business, cotton farmers and purchasers are also in a stalemate.

Yu Hui's family had 11 mu of land, and 7 mu of land planted cotton and other fields to grow wheat and corn.

Cotton was picked in October 10th. Since autumn this year, it is in the fruit setting period of cotton. The weather has been rainy and rainy, and many cotton balls have not been fruiting.

"The output in the past year is more than 500 kg per mu, close to 600 Jin, even 350 catties this year."

Yu Hui said.

The cost of seed cotton has been rising.

The price of seeds and fertilizers is almost the same as that of last year, but the price of pesticides has increased. What's worse is that pesticides are no longer in use. The insecticide resistance of cotton insects is increasing, resulting in the increase of pesticide spraying year by year.

Cotton is a high density labor force, especially in the cotton picking stage.

Last year, the cotton picking cost was 1 jin 4 gross 5, and this year has risen to 1 jin 1 yuan.

7 acres of land, about 1000 catties of cotton, and cotton picking costs 1000 yuan.

Yu Hui has a lot of family members and little cotton growing area, so there is no need to hire workers.

And some large cotton farmers in the village have a large number of employees.

The surge in labor costs this year has made cotton farmers vulnerable to weak planting income.

The cost is rising, and the output is falling. Hui said that the price of cotton would be kept at 5 yuan and 5 pounds.

"At the beginning of October, when picking cotton, the price was only 4 yuan. I didn't want to sell it at that time, and then the price had been rising until November, to 7 yuan and 2. I wanted to sell it at that time, but there were still some cotton confiscated in the field. I plan to sell it together after I sold it. Who knows it will be so few days that the price falls so low."

Analysis of the industry, this round of cotton prices fell sharply, and the central bank recently tightened monetary policy triggered the expected change.

In November 19th, the central bank decided to raise the deposit reserve ratio of deposit financial institutions by 0.5 percentage points since 29.

Li Guoxiang, of the Institute of rural development of the Academy of Social Sciences, said that the rise in agricultural prices has been driven by rising costs in the long run, resulting from a loose monetary policy in the short term. Once the monetary policy is shifted and expected to change, the price mechanism will work, and the price of agricultural products will return to normal prices.

High cotton prices will also lead to a fall in demand.

Since the early September, downstream industries such as processing factories, cotton mills and garment factories have been crying hard.

Xu Wenying, honorary president of the China Cotton Textile Association, said that the small businesses generally had no cotton reserves, nor could they apply for import quotas. They could only be imported through the trading market or with a higher sliding tax.

"Small businesses have poor risk tolerance and little capital turnover.

When the price is too high to exceed their psychological price, they dare not sell. They are afraid that after a high price, they will be in the market for a while.

Xu Wenying said.

Besides the high cost of cotton prices, the cotton textile industry is also facing the impact of RMB appreciation and global inflation.

"The cotton textile industry is equal to two heads being squeezed, so the association now advocates that enterprises should appropriately reduce production, stop production, reduce orders, and make short-term orders."

Xu Wenying said.

Ma Wenfeng, a cotton analyst in Eastern Edgar, believes that the recent drop in cotton prices, in addition to monetary policy and expected change, is also closely related to the closure of large downstream businesses, the reduction of orders and the reduction of cotton purchases.

"But in the long run, supply and demand are still tight.

Cotton production is estimated to be 6 million tons this year, while the total demand is about 10 million tons, and imports of about 2000000 tons. The state has thrown up 1 million tons, and there are still several hundred thousand tons of shortfall.

The expected progress in cotton production is slow, and cotton farmers are reluctant to sell.

Ma Wenfeng said.

Price fluctuation or cotton farmers' enthusiasm {page_break}

The price of cotton rises and falls.

"Our small farmers, the risk bearing capacity is too bad, now the cost of cotton is high, the income is not stable, the state subsidies are too small, only 15 yuan a mu of good seed subsidies, wheat and corn, although the price is not as high as the cotton, but stable, and relatively low cost, higher subsidies."

Yu Hui decided that 11 acres of land would not grow cotton next year, and grow wheat and corn.

In Yu Hui's village, cotton has already been collected, and most farmers have planted winter wheat.

Zhang Chang, a Limited by Share Ltd of the Wei Qiao Textile Group in Zouping, Shandong, said that to solve the contradiction between supply and demand of cotton, it is essential to stabilize the cotton planting area.

In recent years, the efficiency of cotton seed has been reduced, and cotton has been used for many times, with great strength and low price. It is better to grow wheat and corn than to go out to work.

He suggested that the state should increase the subsidy for cotton seed as soon as possible, enhance the enthusiasm of cotton growers and ensure the planting area.

"If we are unwilling to grow cotton, China's textile industry has also become a foreign foundry enterprise. Raw materials are imported from abroad, and finished products are exported to foreign countries, so we earn a processing fee in the middle."

He said.

For cotton, which is not sold in the hand, Yu Hui does not need money for the time being, so he plans to wait and see for a while.

But the storage period of cotton is generally longer. Yu Hui says that a family in their village has even stored for two years. But when cotton is stored for a long time, the linen and moisture will be reduced, and the quality and weight will be lost.

If the price is right, cotton farmers will not be able to store them for a long time.

Those cotton farmers who are eager to spend money may not be so calm as Hui.

"Some people in the village have to refurbish their houses and wait for money. Even if the price is a little lower, they will be reluctant to cut meat, but the problem now is that no one is going to buy it."

Yu Hui said.

Cotton can not take off the hand, but also let the village contractor can not take the contract for next year.

"Last year, an acre land pfer fee is 700, the amount of this year has not yet been set, those contractors can not sell cotton, there is no cash in hand, the village collective in accordance with the usual practice, asking them to pay money before farming, now very troublesome."