Zheng Cotton High Slump &Nbsp; Before Spring Festival Interval Shocks

This year

At present, the main influencing factors of cotton prices have shifted from fundamentals to policies.

The website of the NDRC issued a special document on the State Council's Circular on stabilizing the general level of consumer prices to protect the basic livelihood of the masses. It mentioned that some idle funds and illegal operators manipulate the prices of related commodities by means of fraud, collusion, hoarding, hoarding and other improper means, which is a direct push for the price rise of some agricultural products.

As far as cotton is concerned, the article thinks that "cotton purchase is also a vicious speculation by hot money. The phenomenon of unlicensed acquisition and unlicensed processing is more prominent. Some acquisition companies do not have relevant access qualifications, but they rush to buy up prices."

In accordance with the price regulation measures, "strengthening the supervision of the agricultural futures market and electronic trading market" policy spirit, the Dalian Mercantile Exchange, Zhengzhou commodity exchange and Shanghai futures exchange have raised the margins of various varieties, expanded the limit of the trading limit, and restricted the maximum positions.

According to Zhengshang's notice, the margin standard of cotton futures contract trading will be adjusted from 12% to 7% since the settlement in November 26, 2010.

When the margin is raised, it will be reduced.

At the beginning of December, the state will hold an economic work conference to set the macroeconomic policy for next year.

It is expected that before the conference, the state will continue to regulate prices vigorously and supervise the futures market and electronic trading market.

Cotton spot and futures prices will still be dominated by weak shocks.

Recently, some scholars began to reflect on the recent policy of price intervention by departments concerned. They believed that these measures were not macro-control.

There is a strict definition of macro regulation, which means that the government controls the operation of the economy by controlling the total amount.

The meaning of "macroscopical" is "gross" and "global" rather than "single" or "concrete".

There are only two macro policies: monetary policy and fiscal policy.

The administrative intervention market has a negative effect on the economy and society.

Because in the market economy, price is an important source of information, playing a key role in the allocation of resources.

As prices rise, supply is in short supply. Enterprises that see rising prices perceive profits and increase supply under the guidance of prices.

The result of this is to ease the shortage and automatically achieve a balance between supply and demand.

Therefore, after entering December, investors need to focus on changes in the government's policy. First, the government is still likely to raise interest rates again to control the total amount of money. Two, whether the administration means to manage prices is tending to moderate.

According to the executive meeting of the State Council held on the 29 day, the relevant departments will make amendments to the provisions on administrative penalties for price violations. The revised draft regulations will collude with each other, maliciously hoarding, and fabricate price information to raise prices and profiteering.

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Since the beginning of this year, the volume of cotton futures has been gradually enlarged, and the degree of concern is getting higher and higher. The price discovery function of futures has been better reflected.

At present, enterprises in the whole industry chain of acquisition, processing, trade, textile, grey cloth, printing and dyeing and clothing are all concerned about futures prices, and futures prices have also become an important reference for purchasing and selling prices of enterprises.

Take seed cotton purchase price as an example, in the process of cotton futures prices rising, seed cotton prices have been rising all the way. Recently, with the fall in cotton prices, seed cotton purchase prices have also dropped significantly.

The recent purchase price of seed cotton has dropped to below 5.5 yuan, which is approaching the psychological price of processing enterprises, and the cost of lint cotton is about 23000 yuan to 24000 yuan.

According to the traditional view, commodity prices are affected by supply and demand, supply exceeds demand, commodity prices fall, demand exceeds supply, and commodity prices rise.

However, it is often ignored that fluctuations in commodity prices will also have a significant impact on supply and demand.

Take cotton as an example, in the process of rising cotton prices in the early stage, the upstream cotton growers and processing enterprises expected the price to rise, and they were reluctant to sell. The initial supply was only 30% of the same period in the previous year; the expected price of the downstream middlemen and the textile enterprises increased, and the purchase of cotton ahead of time increased.

Similarly, after the recent decline in cotton prices, cotton growers and processors will have a positive desire to ship goods, and the market supply will increase. Downstream textile enterprises will expect prices to continue to fall, postponing purchases of cotton and reducing market demand.

After entering December, the US cotton will arrive in Hong Kong one after another, and may reach its peak in mid December.

In addition, under the relevant state policies and regulations, Xinjiang cotton output increased before the Spring Festival.

In this way, before the Spring Festival, textile enterprises have ample supply and are in a psychological advantage. It is very difficult for cotton prices to return to more than 28000 yuan.

On the other hand, the future decline in cotton prices is also very limited.

Global cotton output will remain uncertain next year, and the supply and demand of cotton will remain tight in the whole 2010/2011.

If we say that the irrational rise of cotton prices disturb the normal operation order of the industrial chain, the irrational drop of cotton prices will have a worse effect on the whole industrial chain.

At present, only 300 thousand tons of cotton are stored in the state, with little regulation of resources.

In order to ensure the strategic safety of cotton, and in order to better control cotton prices in the future, the state needs to restart the storage and purchase plan in 2011 or 2012.

Considering that the average price level of cotton has been raised, we believe that it is most likely that the state will make reference to the actual paction price of the previous cotton sale and make the future purchase price.

That is to say, when cotton prices are in the range of 20300 yuan to 25000 yuan, the state may initiate the purchase and storage plan.

In 2009, domestic demand for cotton was about 10 million 600 thousand tons, and the gap between production and demand was 3 million 600 thousand tons, an increase of 2 million 600 thousand tons over 2008.

According to the author's investigation, because of the surge in cotton yarn prices this year, the textile enterprises have been operating at the best level in nearly ten years, and have expanded their production capacity.

According to conservative calculation, cotton demand increased by 10% in the new year, and the gap between production and demand increased at least by 1 million tons.

At present, the contradiction between supply and demand of cotton has not been fundamentally solved.

The overall growth rate this year is worse than that of the whole year, and the market is late. The total output is expected to decrease over the previous 6 million 400 thousand tons.

According to the global cotton supply and demand report released by the US Department of agriculture in November, the output of cotton in China and the United States was again reduced by 6 million 530 thousand tons and 4 million 10 thousand tons respectively in 2010/11, while the estimated figures in October were 6 million 850 thousand tons and 4 million 100 thousand tons respectively, and the stocks in the two countries also dropped again at the end of the year, only 2 million 880 thousand tons and 470 thousand tons respectively. The estimated figures for last month were 3 million 200 thousand tons and 590 thousand tons.

The output forecast of India, another big cotton producing country, was unchanged from last month, to 5 million 660 thousand tons.

According to the forecast, the total cotton output in the 2010/11 year was 25 million 93 thousand tons, 311 thousand tons lower than the previous month, but the global consumption also dropped by 859 thousand tons, to 25 million 435 thousand tons.

The end of global cotton inventories in 2010/11 continued to decrease, estimated at 9 million 188 thousand tons, and the inventory consumption ratio was 36.12%, the lowest level since 1993/1994, while the two figures in 2009/10 were 9 million 503 thousand tons and 36.84% respectively.

As long as there is no major recession in the global economy, the tight global cotton situation in 2010/2011 is a foregone conclusion.