Cotton Textile Giant Takes The Lead To Lower The Price Of &Nbsp; Xinjiang Cotton Hits Out.

China's cotton price suffered an avalanche. In just two weeks, the spot price and futures contract price of standard cotton decreased by 10% and 22% respectively.

Digital analysts said in November 23rd that liquidity recovery was tight.

However, the government is suffering from heavy rain.

What can be observed is, as a weathervane of the industry.

"As the largest textile group in the world, to a certain extent, the price of cotton in China has all changed due to Wei Qiao."

A Shandong cotton trader who had contact with Wei bridge pointed out that according to the information he received, after the joint meeting of cotton regulation and control in the middle and late 10 months, the government has clearly cracked down on speculation and made a good control plan. "The idea of regulation and control should be known around November."

In addition to the direct control of leading enterprises to influence market psychological expectations, the national development and Reform Commission completed the investigation of Xinjiang cotton at the end of 10. Xinjiang cotton's intensive production in Xinjiang also started in November.

The Urumqi Railway Administration said in November 23rd that according to the arrangement of pport capacity, the railway should ensure that at least 1 million tons of Xinjiang cotton came out of Xinjiang before the end of December, which has exceeded the amount of cotton used in China for one month.

Xinjiang cotton has been sending at least 300 wagons every day, almost unprecedented. "Such a pport arrangement will continue to reach 2 million 500 thousand tons of Xinjiang cotton."

Cotton price vane

In November 23rd, China's cotton price index (grade 328 cotton) was reported at 27881 yuan / ton, which fell nearly 500 yuan / ton compared with the previous day, down nearly 10% from the 30600 yuan / ton cotton price in November 10th.

Wang Qianjin, an analyst at first textile network, said that the cotton price rose earlier than expected, and the factors of imbalance between supply and demand have been seriously enlarged.

Beginning in September, China's cotton prices began to jump rapidly after a slow rise for a half year. The price of 328 grade cotton exceeded 30 thousand yuan / ton, which was twice the price at the beginning of the year.

The most direct reason behind the soaring cotton price is the imbalance between supply and demand. According to the estimate of 6 million tons of cotton output and 10 million tons of cotton consumption, the gap is as high as 4 million tons.

However, after the annual national cotton television and telephone conference, the national development and Reform Commission and the China Cotton Association convened several meetings of the cotton macro adjustment and the chamber of Commerce. The reasons for the rise of cotton prices have been clearly defined. The basic factors such as supply and demand are not enough to support the rise of cotton prices, and speculation has led to the confusion of the purchase order.

Under the background of the widespread price of agricultural products and the pressure of government inflation control, the cotton regulation plan with heavy hand regulation has been followed.

"Cracking down on malicious speculation and monitoring key enterprises is one of the important means of regulation and control."

The Shandong cotton industry said that the Wei Qiao group was in the forefront of tight monitoring.

What we can see is that in November 11th, Wei Qiao began to tentatively reduce its purchase price of lint. The purchase price of grade three lint was slightly reduced by 200 yuan / ton. On the same day, cotton spot price and futures price fell synchronously.

Beginning in November 13th, Wei bridge continued to reduce the purchase price of grade three cotton by 1000 yuan / ton for several consecutive days, and the pattern of cotton spot and futures price collapse began to appear.

The production capacity of Wei Qiao textile 7 million spindles ranks first in the global textile industry. Its annual cotton consumption is about 1 million tons, accounting for about 10% of the total cotton consumption in China.

The cotton industry said that he had recently visited many places in Shandong. Large and small cotton purchasing and processing enterprises were based on the price of the lint purchase on the day of Wei Qiao, and calculated the level of seed cotton purchase price. "Once the price exceeds this price, it will be very difficult for them to buy, and cotton traders are aware that this paction may face a risk of loss."

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Downstream cotton textile companies are also referring to Wei Qiao quotations.

A large scale cotton textile enterprise in Guangdong has revealed that more than 2 million spindles of cotton spinning enterprises in China are few and far between, and a large textile enterprise such as Wei Qiao is quoted to determine the acquisition cost line, which can control the risk of operation to a certain extent.

In fact, the purchase and sale of cotton has been in a state of stagnation after Wei Qiao has lowered the offer.

According to the foregoing people, the basic situation of cotton spinning chain is that cotton growers do not sell, cotton traders do not accept them, cotton processing enterprises can not receive them, and the lint processed is not sold.

"The current open door acquisition is basically only for Wei Qiao family, but the offer price is lower every day."

On 22 and 23, the purchase price of Wei Qiao three grade cotton was reduced by 800 yuan and 500 yuan / ton respectively.

In fact, this round of cotton prices soaring, many voices in the industry have been attributed to Wei Qiao's intensive purchase of the naughty cotton, and the operation method of "pushing up and pulling down" is actually the same. A person who has been in the industry for many years to do exercises for a large cotton textile enterprise has told reporters that from the perspective of Wei Qiao itself, cotton price is in an ascending channel, which is advantageous to it. With the production of low price cotton at the beginning, cotton and yarn prices will all rise, no matter whether they sell cotton or sell yarn at the later stage, they will gain a lot of profits, and this is also the operation path of all the small scale cotton spinning enterprises in the first half of this year.

"Behind the recent decline of Wei Qiao, it does not exclude the leading enterprises to echo the possibility of the government restraining the soaring prices of agricultural products."

He said that the price of administrative enforcement is still evident.

Xinjiang cotton concentrated in Xinjiang

Improving market supply and demand is also an important part of cotton control plan.

Wang Qianjin said that in the face of the shortfall of 4 million tons of cotton this year, the replenish of imported cotton and reserve cotton is absolutely necessary. However, after the 1 million tons of cotton reserves were put into the market in -10 months in August, the reserve cotton resources of the national stockpile were estimated to be no more than 1 million tons.

In the case of imported cotton, even if the NDRC again issued a quasi tax quota this year and the international cotton price is high, imported cotton will not play a role in restraining the rise of domestic cotton prices.

More importantly, the tight shipping schedule made it difficult for foreign cotton to arrive in time to replenish domestic demand.

Aforementioned large textile enterprises in Guangdong told reporters that the company has purchased tens of thousands of tons of cotton, but due to the tight shipping schedule, the arrival time of US cotton arrived in August next year. The arrival time of India cotton can be earlier, but also to April and May.

The more than 10 thousand tonnes of imported cotton that the company recently arrived is a procurement contract signed a few months ago.

The proportion of cotton used this year is estimated to be 1/3 imported cotton, 1/3 inland cotton and 1/3 Xinjiang cotton. In the past, the proportion of imported cotton was only about 20%.

In this context, how to revitalize the resources available in China's domestic market has become the key to this round of cotton price regulation.

Xinjiang occupies the cotton production of China's 1/3. In November 23rd, the Xinjiang supply and marketing cooperative system introduced that Xinjiang's official and cotton industry estimated that this year's output would be about 2 million 800 thousand tons. However, because the data of Xinjiang cotton's output data are not all the same over the years, the final production data will be greatly corrected.

"If we estimate the output of 2 million 800 thousand tons, the output of cotton will reach about 2 million 500 thousand tons."

The foregoing said that due to the constraints of railway pport capacity, the progress of Xinjiang cotton has also affected the rise and fall of cotton prices in China to a certain extent.

The Urumqi Railway Administration said in November 23rd that the NDRC went to Xinjiang to investigate the purchase and sale of cotton at the end of 10, and coordinated railway pportation. At that time, it was determined that at least 300 wagons should be arranged daily for cotton Sinop before the end of the year.

Wang pointed out that the conversion of cotton can reach 300 thousand tons per month, accounting for roughly 1/3 of cotton consumption per month in China.

The railway personages mentioned above indicated that the number of Sinop cotton Sinop has reached 370 thousand tons since the listing of new cotton in September, and the daily freight volume will not be less than 310 wagons in December, and 1 million tons of Xinjiang cotton will be exported from September to December.

Tens of thousands of tons of Xinjiang cotton, which had been purchased by the Guangdong cotton spinning enterprises, had been waiting for more than a month after they had been waiting for more than a month.

Such pport arrangements are virtually unprecedented.

According to the China Cotton Association, the number of leather cars pported by Xinjiang cotton every day is only 150 cars per day. At the beginning of this year, a large number of Xinjiang cotton failed to go out of Xinjiang, and the cotton price rose, which increased the burden of downstream textile enterprises and export enterprises. After feedback to the top leaders of the State Council, they were directly instructed, so that the railway system readjusted its capacity in April and 3, and rushed to Xinjiang cotton. "At that time, the number of cars per day was 250 vehicles."

According to the number of respondents, cotton prices began to drop sharply under the pressure of multiple measures, including intensive administrative regulation and color regulation, but cotton prices were unlikely to fall before the September surge, considering that the supply pattern did not change.

According to the current price of 6 yuan / jin of seed cotton, the reasonable profit of processing enterprises is 500-700 yuan / ton, and the price of lint should be around 26 thousand yuan / ton.

Wang Qianjin said that the cost and supply and demand support made cotton price overfall unlikely.