Cotton Prices Fell &Nbsp High; History Repeats Itself?

In November 23rd, Zheng cotton fell to 25225 yuan / ton at the close of May contract. cotton The price index (grade 328) began to descend in November 12th, but dropped to 29916 yuan / ton in November 16th, and plunged 1070 yuan / ton a day. On the same day, the cotton price index (grade 527) and (229 level) fell by more than 900 yuan per ton. Since then, the index has continued to decline, and by November 23rd, the price of grade 328 cotton has changed to 27881 yuan / ton. international Cotton price Echoing the echo, New York cotton futures and Cotlook cotton index also began to descend in November 11th.

At the same time, seed cotton acquisition market also experienced ups and downs. Seed cotton purchase prices continued to rise before November 8th, and seed cotton purchase prices in some parts of Shandong and Xinjiang cotton areas rose to more than 14 yuan / kg. Then, by November 12th, the purchase price of most cotton grade 3 cotton fell to about 12 yuan / kg, and the purchase price of grade 4 cotton fell to 11.5 yuan / kg.

Seeing from many sides Cotton grower panic

Faced with the sudden downward cotton prices, the parties appear to be ill prepared. Recently, most cotton spinning enterprises have voluntarily lowered the price of lint, and more cotton enterprises have stopped buying and waiting, resulting in a sharp decline in volume. In November 10th, the cotton electronic matching market MA1011 contract took the lead in diving, and the turnover decreased by 88% compared with the previous trading day.

The boom in the last few days has made many textile enterprises overburdened, or lack of operating rate, or simply stop production. According to Lin Yaokun, Dongguan Textile Co., Ltd., another denim enterprise in Xintang town of Guangzhou city was shut down and shut down in November 12th. Lin Yaokun told reporters that cotton prices are fluctuating and unstable. Enterprises that stop production will not return to work immediately. They are all thinking, "anyway, they have stopped production, so it is better to wait and wait until the cotton price is stabilized."

Wu Jian Chen, a garment factory in Zengcheng, Guangzhou, described one thing to reporters: two days ago, a Russian customer wanted to make a batch of costumes for next spring, and let him quote the price. Wu Chenjian told the client very directly that he could not report it and nobody could report it. Only then could he have the exact price. "Therefore, our factory is not at all afraid to pick up the list for next year. We must know that orders in this year can last until four and May of next year." Wu Chenjian said that the fluctuation of cotton prices is now at a loss for enterprises.

The sudden change of market situation directly affects the purchase of seed cotton everywhere, and also makes cotton farmers panic. According to feedback from Xinjiang, at present, despite the fact that Xinjiang's takeover has dropped from a few days ago, the sales scene is still cold. The seller and the buyer are unstable and have a strong wait-and-see sentiment.

The reporter interviewed several cotton farmers in Handan, Hebei. According to the report, the purchase price of seed cotton has dropped from 12.8 yuan / kg to 11.2 yuan / kg at the highest time. The sudden change of cotton price leads to the acquisition of seed cotton, which is only "having no market price". Most cotton farmers wait for cotton. Nun Jing, a cotton grower, said that he had not sold more than 2000 kilograms of cotton in his family now. At the same time, the cotton merchants who were very active in the past have not been seen recently. Zhang June, a cotton grower, explained: "no one dares to accept it, because no one can tell how much it is."

　 Will cotton prices repeat the same mistakes?

In 2003~2004, domestic and international cotton prices surged and plummeted. Cotton prices rose from 13500 yuan / ton in early September 2003 to 19000 yuan / ton in November, an increase of 46%. By the middle of second June, cotton prices fell to 14200 yuan / ton, or 26%. Many spot traders bought it an hour ago and will lose money in an hour. Many people believe that cotton prices had plummeted and plummeted at that time. Cotton, yarns, fabrics and clothing, the entire textile industry is in frequent fluctuations, leading to many textile enterprises layoffs and production restrictions, business difficulties.

Against this background, in June 18, 2004, 48 cotton enterprises gathered in Zhengzhou and jointly wrote to the China Cotton Association and China Textile Industry Association, calling on the government to introduce policies to stabilize the cotton prices which have fallen rapidly. In their letter, they said that the sudden drop in cotton prices caused the whole industry to be in a predicament, and they were afraid to store too much upstream raw materials in every link. Meanwhile, the price of each link could not be accepted by the downstream enterprises, which eventually led to the loss of the ring. The sharp rise and fall of cotton prices in 2003~2004 led to the 2005 cotton slide tax.

Looking back at the cotton price in 2010, it is "a little shaman". Let's compare the changes in cotton prices between the early September and November. The cotton price index (level 328) rose from 18000 yuan / ton to 31000 yuan / ton, an increase of 72%. In this way, the cotton price inflation in 2003~2004 is only "unprecedented".

"Climb high and fall badly." At present, cotton prices are already high, and have also seen signs of decline. So, we can not help asking, is the current situation really falling or diving?

"The history will repeat, but it will not repeat itself simply," said an analyst at Shanghai intermediate futures brokerage Co., Ltd. The fall in cotton prices is only a technical callback. He said that cotton prices had gone too fast some time ago, and now the fall is normal. He believes that the futures market shipments frequent, short-term prices will remain downward, but fundamentally speaking, the relationship between supply and demand has not fundamentally changed, the possibility of a slump is unlikely, and most likely next year after the Spring Festival upward trend.

Industry experts pointed out that the fall in cotton prices caused panic among the cotton parties concerned, but we must believe in the state's regulatory policies. After all, cotton relates to the vital interests of more than 100000000 cotton growers, and the Ministry of agriculture also has the goal of restoring the cotton planting area to 80 million mu and total output of more than 7 million tons next year. Cotton is unlikely to tumble. It is expected that with the policy guidance of the seven ministries and commissions in the future, cotton prices will enter a reasonable range.

　　 Guiding rational operation of cotton prices

Recently, the central bank raised the deposit reserve ratio, the recent increase in interest rates is expected to increase, and the strong rebound of the dollar and other factors led to the global stock market and commodity market investors fled. Against this background, the seven ministries and commissions of the state have promulgated relevant cotton policies, and the NDRC has issued a notice to combat speculation of idle funds. Investors in the futures market have chosen to carry out arbitrage and settle for security.

Qiao Hui Hui of the Zhengzhou Mercantile Exchange believes that the current price is a reasonable fall, reflecting a state in which futures and spot markets are looking for a reasonable price. He also said that if cotton continues to fall, the cotton gin station at high position will naturally face the risk of hoarding. At this juncture, textile enterprises should also carefully adjust their stocks and make rational use of the futures market.

"Cotton prices are rising horribly, but cotton prices are even more dire." Dongguan Textile Co., Ltd. Lin Yaokun said. The rise of cotton prices has already left some textile enterprises with low profitability. A huge fluctuation will cause a double blow to the textile industry.

The respondents agreed that the relevant departments of the state need to adjust the macro policies in a timely manner, and guide the rational decline of cotton. Once the cotton price reaches a reasonable price, the state must promptly purchase and store the cotton, so as to ensure the stable operation of domestic cotton prices.