Domestic Cotton Market Is Still In A State Of Instability.

Since mid November Cotton price Since the fall, the market has basically digested a series of problems arising from earlier inflation. In the face of the state's strong determination to control and control, the spot price of domestic standard grade cotton dropped 4858 yuan / ton in the middle and late 11 months, and the lowest fell to 26377 yuan / ton. At this point, the bottom of cotton price was confirmed, and then cotton prices at home and abroad entered the bottom stage of oscillation.

At present, the cotton price is playing a game between the rigid gap and the macro regulation. The market's worries about China's policy regulation remain, the market is still in an unstable state, and the whole industrial chain is in a state of stagnation. High priced cotton acquisition companies are constrained by costs and future. Supply and demand gap At present, we insist on not selling, but the cotton mill is unable to rush to buy the raw materials because of the high price and the current price reduction. Facing the current unstable cotton prices, the market wait-and-see sentiment is strong, and it is necessary to stimulate factors to break this wait-and-see pattern. With the increase in cotton and cotton prices in recent days, lint prices have shown signs of stabilization and stop after the stalemate. Although the transaction is still in a slack, it has already changed well, and some cotton mills have begun to make enquiries, and the stalemate in the industrial chain has changed.

Judging from the fundamentals of the cotton market, the current market stalemate has not been effectively alleviated, but from the perspective of all sides, the confidence of hoarding cotton enterprises is sufficient and basically no longer offers a low price. It is understood that if cotton prices continue to weaken, most enterprises will wait for shipment after next March, and raw material inventory of downstream mills is a test for enterprises. Judging from the purchase intention, cotton mills are most worried about cotton price instability. Once the downstream yarn price has experienced the adjustment of this round of enterprises, considering the resources of the latter part of the year, the cotton mill does not rule out that it will finally break the stalemate and buy raw materials in the market. The subtle changes that may occur in the industry link are worth our attention.

In recent years, the domestic cotton market has always maintained a certain gap between supply and demand, and it needs to rely on imports to make up for it. In this year, China's cotton production is 6 million 500 thousand tons and its consumption is 10 million 230 thousand tons. There is a gap between supply and demand of nearly 4 million tons in the market. The cotton needed to make up for the shortfall will be mainly imported from the United States, India, Pakistan and other countries. At present, the world's largest exporter of cotton -- the US expects to export 3 million 430 thousand tons this year, while in the current 4 months it has completed the signing of 2 million 440 thousand tons. The India cotton export policy has been erratic, but whether it is cotton exports or cotton yarn exports, the policy is generally tight; Pakistan has suffered a lot of reduction due to disasters. Although the US Department of agriculture adjusted the world's cotton production and consumption to the same level in the monthly supply and demand report in November, supply remained tight for domestic cotton consumers.

In addition, China's cotton consumption is increasing, which is evident from the yarn production over the years. China's yarn production is increasing year by year, and the output in the first 10 months of this year is 22 million 400 thousand tons, higher than that of last year. At the same time, the price difference between cotton and lint remains high this year, which means that downstream enterprises not only have huge profits, but also have adapted to high cotton prices in the process of continuous rising cotton prices.

Despite the recent adjustment in China's policies and the decline in cotton prices, the cotton market has a large background. market Worries about the late supply shortage are always accompanied by this. This is also the main cornerstone for the market to stabilize, and the market is also expected to increase the supply of international resources after March next year. Although the regulatory policy can be phased in, it is difficult to fundamentally solve the problem. The usual cotton reserve control measures used in the past years will not be reflected in the policy of the year to come, because we can see from 2006 to now all the policy of collecting, throwing and storing cotton, the quantity that has been thrown and stored is far greater than the quantity of reserve and storage, and the stock of reserve cotton has bottomed out, which will support the cotton price for a long time. It can be seen that the bottom of cotton prices in China can basically be confirmed at present.