2011 Cotton Prices "High Fever" Difficult To Retreat

Cotton futures rose from less than 17000 yuan per ton to more than 33000 yuan in 2010 and stood ten years high.

Will cotton prices continue the bull market in 2011? Analysts believe that cotton prices will be running high and volatile in 2011. On the one hand, cotton planting area is limited; on the other hand, market demand is increasing rapidly, so cotton price is expected to hit a new high.

Yield recovery or limited

"In 2011, the gap between supply and demand in the cotton market will be reduced."

Yang Guoqi, an analyst at Jinshi futures, pointed out that in 2010, the purchase price of seed cotton rose sharply, affected by the rise in global cotton prices, which farmers could not imagine.

If the cotton price increases in the past years are more beneficial to cotton companies, the farmers who really make money this year are farmers.

The higher planting benefit in 2010 aroused the enthusiasm of cotton growers, and domestic cotton growers in 2011.

In addition, according to the National Conference on planting industry held by the Ministry of agriculture, the potential productivity of the northwest inner cotton area will be excavated next year, and the cotton planting area will be restored to 80 million mu next year.

China Cotton Association survey shows that in 2010, China's cotton planting area was 77 million mu.

Yang Guoqi said: "in 2011, the farmers' willingness to grow cotton increased as the benefits of planting prices improved. However, the recovery of planting area was not an overnight event, and it needed a year or even longer to recover.

In addition, there is still the biggest uncertainty in the cotton growth stage. If the weather is not abnormal during the planting season, the domestic cotton output in 2011 cotton will increase in a limited way, with an estimated increase of about 4%.

According to the interim policy of Shanghai, according to the current policy, the difficulty of raising domestic planting area in 2011 is still very difficult.

International cotton prices are still hot.

Since domestic cotton production growth is limited, can the supply of international cotton market be compensated? Analysts believe that this is also very uncertain.

Data released by the US Department of agriculture show that the 2010 cotton year is the end of the global cotton trade.

Mike Stevens, independent cotton analyst in the US, said that cotton prices will remain at a record high in 2011. "Unless there is a serious slowdown, it is estimated that no factor can change this situation."

Another analyst expects that in the autumn of 2011, before the new cotton harvest in the United States, the tight supply situation in the global cotton market is unlikely to ease.

Yang Guoqi pointed out: "the supply of cotton in the international market is not yet certain, but the demand for cotton will definitely rise year after year."

A senior government official in India said a group of India government and industry officials will meet in January 6th to reassess the cotton output of the country in the current market.

The cotton Commission of the United States will announce the cotton seed prediction survey in February 2011.

The United States Department of agriculture will announce its cotton planting area forecast data in March 31, 2011.

{page_break}

At present, many countries

Cotton prices are running high

Shenyang Wanguo futures analyst Wang Yingliang pointed out: "throughout the year, due to the strong support of downstream demand, cotton prices will continue to run high in 2011."

Wang Yingliang pointed out that in 2011, the domestic cotton market was under the pressure of policy. The central rural work conference will ensure the effective supply of main agricultural products, and strive to maintain a reasonable level of agricultural products prices, which has been included in the key tasks of agricultural and rural work in 2011. This highlights the importance of the central government's efforts to strengthen agricultural product price regulation.

Yang Guoqi believes that in 2011, before the listing of cotton, the tight supply pattern may be maintained.

"We expect a new round of inflation in the market around March. Zheng cotton will go up with the price rise in March, and the main contract may hit a new high, but once the cotton price rises sharply, it will cause the regulators to attach great importance to it, or there will be severe policies to curb prices."

Yang Guoqi said.

"Generally speaking, cotton prices in 2011 will be affected by many factors and prices will fluctuate."

Yang Guoqi pointed out that "cotton futures prices will reach up to 32000 yuan per ton, minimum at 23400 yuan per ton."

In the medium term expectation of Shanghai, under the pressure of macroeconomic regulation and control, cotton futures prices are difficult to continue the strong bull market in 2010, and the possibility of rising to more than 30000 yuan per ton in 2011 is less likely.

Because of the limited resources, the demand is relatively rigid, and it is difficult to fall to below 22000 yuan / ton, so the probability of maintaining high volatility is relatively large.

In addition, analysts also warned that the second half of 2011, the world may face liquidity tightening, then the cotton bull market will end in the second half of 2011.