Policies Squeeze Out Bubble &Nbsp; Cost Support Period Cotton

1. The first quarter of 2011 is expected. Cotton import Volume increased by 23% over the same period.

Based on the year-end quota surplus and the preconcentration of the port to Hong Kong, the volume of cotton exported to Hong Kong in January and February reached 850 thousand tons in 12 and February, an increase of 69% over the same period last year. In February, due to the reasons for the Chinese New Year holidays, the growth rate of imports will decline in February. We expect that imports will increase in March.

On the whole, the first quarter will reach 100 million tons in total in the first quarter, an increase of 23% over the same period.

Figure 1: cotton imports are expected to increase by 1 million 42 thousand tons in the first quarter of 2011, an increase of 23% over the same period last year.

Pictured as Cotton import Volume chart.

Fig. two: monthly import volume of cotton in China over the years (unit: ton)

The picture shows the monthly trend of cotton imports.

Two. In February, the profit of cotton exports to Hong Kong was 50% higher than that of normal trade. {page_break}

According to the USDA export weekly report, China has concentrated on signing contracts. American cotton In October, the price of the ship was near 28000 yuan. According to the quotation of 31500 to 32000 of the current port's cotton price, the profit reached 13%, which was 50% higher than the normal trade profit rate. High import profits stimulate the shipping psychology of traders.

Photo three: the US cotton export statistics show that China's concentrated signing time is in October.

The picture shows the US export statistics of upland cotton.

Three. Consumption expectation supporting price

According to the historical rule, after the Lantern Festival, Chinese textile enterprises will gradually resume work, and consumption expectation has certain support for cotton prices.

Judging from recent years, cotton business inventories generally appeared in the first half of December. Judging from the current growth momentum of China's textile consumption, this year should follow the same rule.

Later cotton prices are expected to continue to rise under the push of inventory decline.

Chart four: cotton business inventories reached a high level in December.

The picture shows the US export statistics of upland cotton.

Figure five: textile enterprises will replenishment {page_break} after the festival and when cotton prices fall.

The picture shows the stock chart of cotton industry.

Four. Research shows that:

4.1. cotton yarn prices rose in February, but orders were less.

A survey of small and medium-sized textile enterprises in Hubei province of 5-7 spindles shows that the price of cotton is soaring and plummeting and the consumption psychology of "buying up or not buying down". At this stage, the sale of 32S pure cotton yarn in Hubei province is 40000 - 41000 yuan / ton, and sales are not ideal, and orders are few. The market is in a wait-and-see state.

4.2. textile enterprises have declined in yarn sales profits

According to CC-Index328 grade cotton index 30365 yuan / ton and 32S pure cotton yarn price index 39600 yuan / ton, production and sales profit is 2627 yuan / ton.

Sales of cotton yarn is not ideal, yarn sales profits have also declined, according to the survey of several enterprises, as early in the low price of 28000 yuan / ton stock preparation for about 3 months of cotton inventory, so if long sales are not ideal, will take appropriate reduction of yarn prices to increase sales.

Figure six: 32S cotton yarn price index

The picture shows the 32S cotton yarn price index chart.

Figure seven: sales profit of textile enterprises 32S combs {page_break}

The picture shows the chart of sales profit of 32S combs in textile enterprises.

4.3. textile enterprises in Hubei textile industry recruitment difficulties affect operating rate

After the Spring Festival, it is difficult to recruit workers to plagued the coastal textile enterprises. According to the survey, the recruitment of textile enterprises in Hubei province is also not ideal after the Spring Festival, and the operating rate is generally maintained at 80% - 90%.

Table 1: Hubei textile enterprises hiring difficulties affect operating rate

Enterprise yarn stock recruitment difficulties affect enterprise orders

The yarn stock start up rate of 5 to 6 days for a 5-6 million textile enterprise in Hubei is 90%, according to the previous order production.

A 5 to 60 thousand spindles textile enterprise in Jujube, Hubei province has no yarn stock start up rate of 80%, according to the pre order production.

Hubei province Xiantao 4 - 50 thousand spindles textile enterprises have no yarn stock start up rate of 90%, stable customer relationship and resources.

There is no yarn stock in a 5 - 60 thousand ingot blending enterprise in Fujian. The sales of blended yarn are relatively good, and the operating rate is 100%.

Source: Meyer futures

Five. Basis:

Figure ten: after the successive adjustment of cotton futures, the current price spreads are zero, and the base bubble is squeezed out. From the cost of cotton acquisition and hoarding, CF09 is approaching the spot hoarding cost. {page_break}

The picture shows the trend chart of cotton basis.