One Word: In 2011, The Main Contract Of Zheng Cotton Will Show "Before And After The Low."

At the end of last year, with the government's strong price management measures and a series of tight liquidity policies, the price of agricultural products at home and abroad showed an obvious callback.

With the tightening of domestic policy tightening, the price of overseas agricultural products has come into a new round of rising prices.

Global cotton production continued to decline in 2010/2011, and consumer demand recovery will exceed expectations.

The US Department of agriculture data show that in 2009/2010, cotton consumption in the world exceeded 15 percentage points of output, resulting in a sharp decline in international cotton inventories, leading to a surge in cotton prices.

This year, the general increase in the prices of agricultural products has increased the market's view of the year 2011.

There is a high profit margin in the downstream cotton mill.

The rise in yarn prices is one of the major factors in the cotton price increase in the previous year.

The low inventory of Chinese government and business is the trigger for rising cotton prices.

China's cotton production is insufficient for a long period of time, and the total consumption should be about 25% to 30%.

Last year, domestic cotton output was 6 million 400 thousand tons, while consumption was over 10 million tons. Such a large consumption gap was only offset by imports.

And the change of domestic import demand will have a great impact on the international cotton price.

Recently, the price of cotton to China's main port has generally been around 160 cents, and the domestic delivery price has been close to 28 thousand yuan.

Statically, the huge gap between supply and demand in the Chinese market this year will make cotton prices lack a downward adjustment power.

But how tight is the space for continued innovation under the tight balance of global resources? What is the relationship between supply and demand in the cotton market this year? We believe that in addition to cotton production and initial inventory, national policy orientation, exchange rate changes and the import rhythm of cotton imports are all factors that can not be ignored.

There are many factors that affect cotton prices, but the main factors are supply and demand.

Of course, there are consumers' purchasing power, consumer preferences, supply and demand of alternative products and prices, population changes, and changes in commodity structure.

In addition, such as economic fluctuation cycle, financial and monetary factors (interest rate, exchange rate), political factors, policy factors, natural factors, speculation and psychological factors can all affect the operation of cotton prices through supply and demand.

From the trend of supply, the trend of decreasing cotton planting area in China will continue, because the strategic position of China's grain security will not change at present. Only when the price of cotton continues to rise sufficiently high will the cotton planting area increase.

Demand, in addition to textile enterprises this year's good results and expand production, price increases also objectively stimulate investment and speculative demand.

Therefore, the turning point of the cotton bull market will only occur when there is excess demand and deterioration.

That is to say, if the RMB appreciates substantially, or the macro-economy will recalitate again, the loose monetary environment will end and the demand will deteriorate, the trend of uplink of cotton will change.

Otherwise, the high cotton price will become a normal state.

The global economic recovery has stabilized, but it has created a relatively stable external environment for China's textile industry.

Domestic sales continued to maintain steady growth and become the leading force to support cotton consumption in the textile industry.

Affected by the price of raw materials, labor costs and other factors, the profitability of cotton industry will decline.

On the whole, we believe that the overall situation of cotton price fluctuation will stabilize in 2011. Due to the existence of macroeconomic regulation and control and a series of uncertain factors, we expect that the main contract of Zheng cotton will run in the range of 22000 yuan / ton to 31000 yuan / ton in 2011, and show the trend of "low in the first half of the first half of the year".