Does Price Decline Mean The Turning Point Of Agricultural Prices?

Since November, the government has been throwing away its reserves, and a series of price stabilization measures have been introduced. Under the severe wind and rain regulation, the price of agricultural products has finally changed the crazy upward trend for several months, just like the tamed wild horse is returning to its normal trajectory. In just two weeks, the price of cotton white sugar, which was previously eyed by idle capital, plunged sharply, and the price of standard cotton fell by nearly 13%, and the price of sugar dropped by nearly 1000 yuan per ton.

Cotton and sugar are linked to "big dive".

First, cotton prices suffered an avalanche.

In just two weeks, the spot price and the futures contract price of standard cotton fell by nearly 13% and 20% respectively.

The "fuse" of cotton price reduction is that the industry weathervane Wei Qiao group began to downgrade its third grade cotton and four grade cotton lint to the factory reception price in November 11th, and the reduction rate of single day even more than thousand yuan per ton, so cotton prices continued to plummet.

China Cotton Association released data yesterday, the Chinese cotton price index (grade 328 cotton) fell 593 yuan to 27288 yuan / ton on that day, compared with the high point of 31302 yuan / ton in November 11th, 11 days or so dropped 12.8%.

The previous 328 grade cotton once exceeded the price point of 30 thousand yuan / ton, twice the price at the beginning of the year.

At the same time, cotton futures also fell all the way, with a drop of around 20% in two weeks.

At the same time, sugar prices also plunged rapidly, within a mere two weeks, the price of each ton fell by nearly 1000 yuan.

In November 23rd, the sugar price in Liuzhou, Guangxi's main sugar producing area, was quoted at 6800 yuan / ton, while in November 8th, the price was 7600 yuan / ton. In just two weeks, the price of sugar has changed from a rapid rise to a sudden drop of nearly 1000 yuan.

In addition, reporters also learned that the second half of this year, rising oil prices are now showing signs of decline.

In some parts of the wholesale market, the wholesale price of first class soybean oil is 9600 yuan / ton this week, compared with last week's 10450 yuan / ton, it dropped by 850 yuan; the four grade soybean oil dropped to 9500 yuan / ton from last week's 10300/ ton, and vegetable oil per ton also dropped 300 yuan.

Intensive regulation and combat speculation

Analysts generally believe that this decline is mainly domestic.

Take sugar price as an example, Shi Xiangling, an analyst at China Airlines, believes that monetary policy tightening is expected to heat up in the short term.

In November 10th, the central bank announced that it raised the deposit reserve ratio by 0.5 percentage points from 16 days. In November 19th, the central bank announced that the reserve requirement rate rose 0.5 percentage points from 29. This indicates that the central bank has tightened inflation expectations by controlling the size of credit and raised the expected rate of increase in interest rates within the year.

In addition, the government has taken a series of measures to stabilize prices, which is likely to affect the speculative atmosphere in commodity futures and spot markets and thus suppress sugar.

"In the short term, the tightening of domestic policy and the undetermined trend of the US dollar have overlapped each other, strengthening the demand for adjustment in the white sugar market.

It is estimated that sugar will not be high enough in the short term. "

Shi Xiangling analysis.

Yongan futures also believes that the basic framework of sugar in the near future is clearer, and that the new sugar will be fully listed, and the supply tensions will be substantially alleviated. Therefore, the short-term price rises will be less likely.

The cotton market is also not optimistic.

Analyst Zhai Naigang believes domestic

The price inflection point of agricultural products will appear now?

So does this price decline mean that the price of agricultural products will be inflection point?

In this regard, analysts believe that this policy has only stopped the accelerated upward trend in the early November. In the context of tight supply and demand of some products and strong inflation expectations, prices may rise again after the end of this year to the beginning of next year.

Shi Xiangling pointed out that due to the abundant liquidity and the impact of natural disasters on the main producing areas of sugarcane, it may lead to limited sugar supply and higher sugar production cost, which will limit the drop of sugar prices and make sugar prices continue to be at a high level in the near future.

In the medium term, there has been no fundamental change in market liquidity that has pushed the rally.

In the long term, the cotton supply and demand situation in 2010/2011 has not changed since the Spring Festival. After the Spring Festival, textile enterprises still face the embarrassment of less quality resources.