Cotton Prices Are Expected To Fall To Long-Term Average.

Recently, in terms of international cotton prices, most of the economic data released by Europe, the United States and China have been better, and market sentiment has tended to be optimistic. The US dollar index has dropped to support the rebound in commodity prices, and both the volume and volume of US cotton exports have both picked up. The government of India has restricted the export of cotton yarn and raised the price of international cotton.

Zheng cotton futures rose.

Li Xuerong, a senior researcher at CIC, believes that under the strong control of national policies, cotton prices have experienced a rapid decline and there are signs of bottom up.

The main reason is that there is no change in cotton shortage and market growth.

Judging from the supply and demand of cotton market, the cotton gap still exists.

China is the world's largest cotton producer, but also the largest cotton consumer. Its supply of cotton is as tense or even more intense than that of other parts of the world.

Chinese farmers reduced cotton planting area by 12.3% in 2009-2010, while severe weather hit during the cotton growing season reduced cotton production by 11.4% in 2009-2010.

Meanwhile, as the world economy began to recover, the demand for cotton increased, leading to an increase of 8% in cotton consumption in China.

Judging from the circulation of cotton, most of the cotton resources in the market are still concentrated in the hands of major cotton traders. Many cotton seeds in Hebei, Henan and Hubei are concentrated in cotton growers.

In the short term, the fluctuation of cotton prices is a game between cotton producers and textile enterprises.

With the trend of international cotton prices and the change of cotton futures prices, cotton producers have adopted a small quantity of shipments to test the market reaction, and cotton farmers also have the mentality of selling.

At present, textile enterprises are still waiting for raw materials.

Although most cotton enterprises are optimistic about the future market, but because of hoarding funds, capital turnover is affected, cotton merchants have the need to withdraw funds, some cotton merchants have the intention to ship, and as the market capital chain liquidity tightens, Cotton Traders' reluctant selling mentality will further weaken; in addition, the textile enterprises' capital side has begun to appear loose, especially some enterprises have already run out of stock, strong desire to purchase cotton, these will promote cotton flow.

The fluctuation of cotton prices is closely related to the financial level of Cotton Traders and the order situation of cotton spinning enterprises.