Cotton Prices All The Way Down &Nbsp, Textile Industry Hard To "Inventory"

Textile industry hard to "inventory"

From futures market To the spot market. Cotton price Once again, ride the roller coaster, all the way down. May 5th, Zhengzhou commodity spanaction The cotton main contract CF1109 fell below 25000 yuan / ton integer, closed at 24640 yuan / ton. Decline Up to 5.9%.

For more than 2 months, cotton futures Down about 10 thousand yuan. Insiders said that the weak spot market in cotton was the main reason for the fall in futures prices.

What makes the industry "entangled" is that the problem of "high inventory and difficulty digestibility" is coming back from the downstream garment and textile enterprises to the cotton trading market. The entire textile industry has entered a difficult "out of stock period".

"Off and on down" has been a downward trend in cotton prices. It may be possible to rebound before the new cotton season, 7 or August this year. There are institutional analysis, with the new cotton planting area increased, cotton prices next year will be difficult to run at the price of 30 thousand yuan / ton.

Yang Guoqi, a researcher at the Jinshi futures cotton group, told reporters: "at present, futures prices and spot prices are upside down, and market prices and cost prices are upside down." In May 5th, China's cotton price index (spot price) closed at 26460 yuan / ton, also down 137 yuan / ton compared with the previous trading day.

Downstream clothing and textile enterprises have fewer orders and more inventory is the root cause of cotton price inversion.

Because of the continued appreciation of the renminbi this year, the profit margins of domestic garment exporters have sharply decreased. In May 1st, the third phase of Canton Fair, which was regarded as the weathervane of garment export industry, was opened. However, the enthusiasm of buyers in Europe and America was significantly lower than in previous years. Many garment exporters said, "no consultation was conducted on the first day of the fair."

According to the reporter's understanding, at present, the European and American orders have shifted to other Southeast Asian countries. A large number of small and medium-sized foreign trade export enterprises had to stop production, and the demand for cotton textiles was sharply reduced.

Downstream demand is not strong, coupled with the production of a large number of yarns and grey fabrics when cotton prices are high, cotton spinning enterprises are also having a hard time, but the higher inventory is hard to digest. Some cash strapped cotton mills chose to stop production, while others chose to promote the return of funds.

In this situation, the market has basically stopped the acquisition of raw seed cotton. Cotton seeds on cotton growers are hard to get rid of. It also affected the cotton farmers' confidence in planting new cotton. It is reported that the cotton planting area in Dezhou area of Shandong province will decrease this year compared with last year.

Yang Guoqi believes that at present, the entire textile industry has generally entered a difficult "out of stock period", and weak spot market will be difficult to support cotton futures prices.

"If cotton futures prices can not be supported at the 24500 yuan / ton mark, they may continue to explore until the cotton purchase and storage price is 19800 yuan / ton." Yang Guoqi is not optimistic about the trend of the later stage.