Alternative Harvest Of Cotton Enterprises: Forced Market Adventure

A rare increase in cotton prices has made cotton processing and textile enterprises feel that "

In the past three months,

Under the trend of asset securitization, it is also a way for cotton enterprises to be able to ensure stable production by participating in the futures market.

"Futures" cotton enterprises

The cotton futures market in September suddenly poured into some special new households.

A medium-sized Futures Company general manager said: "these customers do cotton basically warehouse operation, and will not look at the charts, do not want to learn."

"At that time, a lot of cotton enterprises came here, and they were eager to open accounts. They opened the door and bought a lot of them."

A large Futures Company deputy general manager said.

Nanhua futures cotton analysis master Xiaoyan said that in September, there were many cotton companies that came to her to do the hedging program. "To be honest, before the cotton related enterprises basically did not do futures hedging, now these customers are eight percent and ninety more."

Wang Ruifen (a pseudonym) is one of these "novice".

As a deputy general manager of a large cotton processing enterprise in Hebei, she has always believed that "inventory is king". For many years, she adjusted cotton stocks by making judgments on cotton prices ahead of time.

"If we are not forced to do so, we will not touch futures."

Like the vast majority

This year, before and after the launch of new cotton, she felt "dreadful". Cotton prices rose much more than they expected. What's more frightening is that they basically can't buy Cotton in September.

The same pain spread among different cotton companies.

Domestic cotton farmers frequently default, and imported cotton is also in urgent need.

"In August, orders for importing cotton could not buy the cotton that arrived in December."

Chen Tao, chairman of Louis Da Fu Trading Co. Ltd.

Starting from around September 10th, cotton prices began to rise in a straight line.

Wang Ruifen noted that cotton prices at that time were 22000 yuan per ton, while cotton on the market had risen to 25000 yuan per ton.

After consulting with the general manager, Wang Ruifen got 10 million yuan of funds, quickly opened a futures account and bought the 300 hand cotton futures contract at the end of September.

"The price of futures is locked, and we also want to wait for the futures contract to be delivered at a mature date. The company can also save a little bit of cotton."

Wang Ruifen said.

Unexpected "profiteering"

Wang Ruifen's story of "adventure" in the futures market is not a case in this year's cotton business.

According to the data, the total volume of cotton contracts in Zhengshang was 19 million 870 thousand hands in September, an increase of 3500% compared with the same period last year, and the position of the cotton contract increased by 57%. In October, the cotton contract volume continued to grow by 3178%.

The above medium-sized Futures Company general manager revealed that these cotton enterprises had a very accurate grasp of the market. One of his customers bought 900 hands in September when the cotton price was around 18500 yuan in September. When the price was slightly adjusted in October 15th, the price was closed again, and the second round of the first second rounds rose again in October 20th. When the price rose to around 32000 yuan in November 8th, the margin was 15 million.

It can be said to be a perfect operation.

Wang Ruifen's 10 million yuan has also doubled.

Accustomed to the annual profit margin of the single digit cotton processing industry, she has never seen such a battle.

At this point, if the delivery period of cotton processing and selling to earn a little profit, Wang Ruifen thought it was not cost-effective.

"Most cotton enterprises enter the market for the purpose of making delivery or making guarantees, but finally they become speculators."

Galaxy futures cotton analyst Zhang Hongzhou said.

In fact, delivery has become an impossible option.

According to the data provided by Fu Peng, chief macroeconomic analyst at the mid term Research Institute, from the middle of September to the beginning of November, the registered warehouse receipts of Zheng Shang's cotton contract were almost zero.

The total number of registered warehouse receipts basically represents the number of stocks available for delivery, and by the end of September cotton contracts have reached more than 290 thousand hands.

The power of the cotton multi head was clearly covered.

In late October, Wang Ruifen received a phone call from the Futures Company, saying that the exchange asked cotton to take the initiative to liquidate the warehouse again and sent a "risk warning book" to it.

But in desperation, she made a profit on her cotton contract.

"In order to control" forcing the warehouse, "the exchange launched a set of combined punches, including the following measures, such as giving Futures Company talks, finding customers, sending regulatory warning letters, limiting positions, and prohibiting multiple orders.

One industry insider said that at the time of the most exaggeration, the exchange even forced the most profitable bulls and the short liquidation.

Future road

Cotton futures fell sharply in November 10th after two straight months of rapid growth.

The cotton processing and textile enterprises in the middle of the industrial chain have been attacked again and again.

"Some enterprises bought cotton at a high price, then began to fall sharply, and downstream enterprises were reluctant to rush to place orders, hoping to drop deeper."

Deputy general manager of a Futures Company said that cotton enterprises were "forced on both sides" and were very passive in the rise and fall of cotton prices.

"At present, the textile enterprises that stop production may be around 20%."

Zhang Hongzhou estimates.

Although the industry suffered heavy losses, because most of the companies involved in futures trading made a profit on the relatively accurate nodes, which eased the tension for this year's report.

"Most of the customers who make cotton here are liquidated at around the high point, basically making a lot of profits."

A Futures Company general manager said.

Li Zhihang, general manager of Ningbo VICCO Textile Group, said that the company has always been concerned about and participated in Zhengzhou cotton futures. In the early stage, when spot purchase was defaulted and the price was low, it had done a lot of hedging in the futures market. Later, after the purchase of cotton in the spot market, the position of the flat swap position was greatly reduced, and the cost of purchasing and raw materials was greatly reduced.

At present, the proportion of cotton enterprises participating in futures is lower than that of soybean industry.

According to Zheng Shang's statistics, there are 2800 legal person households involved in Zheng business, accounting for only about 10% of the whole industry.

"The rise and fall of this round of cotton prices has brought a lively risk education course to cotton enterprises," said Zheng Shang's official. "Under the background of market economy, price fluctuation has become the norm, and futures are not guaranteed. Enterprises are equivalent to gambling."