India'S Export Policy Will Affect The Direction Of Cotton Prices

Analysts pointed out that

By speculative fund sales dragged down, the 6 day ICE cotton end of the continuous limit has been reported down, the main contract in March fell 1.91 cents, eventually closed at 1.3043 dollars.

On the basic level, the Informa raised the estimated US cotton planting estimate to 12 million 200 thousand acres in 2011, a four year high, which is about 12% higher than the same period last year.

A senior official of the India government said that the volume of cotton arrived in India's domestic spot market has dropped by 2.5% over the same period so far in 2010/11.

Market participants believe that although the futures market has been adjusted, but the market is still worried about the market supply before and after the end of the year, strong demand in China, the rapid consumption of new cotton stocks in the United States and India's outstanding export policy are likely to detonate the next wave at any time.

It is understood that the price of seed cotton has been stable in the spot market in recent years, and the purchase price of the four grade seed cotton has risen to 4.8-5.2 yuan, but cotton farmers are still reluctant to sell.

Textile mill enterprises are more cautious because of their recent weakness in their products, and fewer purchases in the market.

In view of the current flickering and damaging conditions of India's cotton export policy, and the approaching expiration of the 2010 quota, Chinese enterprises will pfer more attention to the United States cotton and Egyptian cotton.

In December 6th, the price of China's main port of imported cotton continued to rise by 6 cents. Compared with upland cotton, the performance of long staple cotton was even more eye-catching. The United States Pima cotton rose 11 cents due to strong demand and insufficient supply. At present, the price of Egypt's kirzha 88 and the United States 2 grade Pima cotton are 265-268 cents.

According to China's weather network 7 reported that in the next three days, Inner Mongolia's Middle East, Northeast China, southwestern and Northern Xinjiang and other places have small to moderate snow or sleet. Among them, there are heavy snowstorms in southeastern Heilongjiang and northeast Jilin. There are small to moderate rain or showers in southern Sichuan, Yunnan and Guizhou, and there are sleet in high altitude areas such as Yunnan and Guizhou.

To sum up, Zhai Naigang, an analyst, believes that the export market in India has made the market nervous and tight, and restricts cotton exports after limiting cotton exports. Market participants believe that this will bring another wave to the international cotton yarn market.