Cotton Prices Are Upside Down At Home And Abroad, And Cotton Producers Are Forced To Abandon Them.

Although the first few trading days "faintly" appeared a rebound trend, but analysts generally believe that in the short term it is difficult to turn back, the 24000 yuan / ton is the bottom of the stage.

In May 12th, the China Cotton Information Network released a series of unbelievable figures: the downstream yarn KC32S reported 33100 yuan / ton, down 1750 yuan / ton, and fell by more than 5% on a single day. Behind this string of numbers is Cotton spot Futures prices have been strong in the past two months. In the meantime, the cotton trade began to contract phenomenon, and some cotton spinning enterprises gradually changed from limited production to stop production.

Cotton merchants abandon rate increase

According to the head of China Cotton Association, 2 months ago, Cotton trade The phenomenon of commercial abandoning has begun to emerge. In the weekly statistics released recently in the United States, the default situation in cotton trade is also mentioned. An grain futures analyst Jiang Xingchun said that in March this year, the international cotton prices rose sharply, but the domestic cotton prices rose relatively slowly, and domestic and foreign cotton prices were hanging upside down.

Compared with the purchase of domestic cotton, imported cotton once lost 7000 yuan / ton, when the default rate was about 20%. "The default rate for orders arrived in Hong Kong in May and June this year has risen to 30%." Jiang Xingchun told reporters that there are many factors contributing to this result. He further pointed out that the US state exchange's recent registered warehouse receipts trading volume was reduced, and most of them were liquidated. U.S.A Exit In the Chinese market, cotton has returned to the international market, causing many traders to be trapped. Therefore, cotton is reentering the US market for delivery. This can be said to be a direct cause of the breach of order.

In addition, Ren Xinpu, vice president of Yongan Futures Research Institute, believes that the background of causing cotton traders to abandon their contracts is a sustained rise in prices in the second half of last year. He said: "since the cotton price continued to soar in the second half of last year, it has been superimposed by multiple cost pressures. The profits of domestic mills have been continuously compressed, resulting in the weakening of raw material purchasing intention, resulting in the phenomenon of abandonment. Although cotton prices have begun to callback in recent years, cotton prices are still at a high level compared with the first half of last year. The cotton price callback will take some time to reflect the transaction order. " He also mentioned that since the domestic monetary policy has been tightening this year, the financing environment is not ideal, and for small and medium sized cotton spinning enterprises, the fund situation is not very optimistic. Moreover, the coldness of downstream demand is gradually reflected in the cotton trade in the upper reaches.

Cotton spinning enterprises "difficult to inventory"

Cotton traders are having a bad time and cotton spinning enterprises are facing a crisis. Because cotton textile enterprises had strong expectations for the rise in cotton prices in the second half of last year, most enterprises continued to purchase raw materials and increase stocks. However, at that time, a large number of warehousing cotton has become a heart disease of cotton spinning enterprises.

Ten thousand managers of a medium-sized cotton spinning enterprise in Henan have no choice but to point out that the average purchase price of raw materials in the cotton mill last year was around 28000 yuan / ton. If calculated with this figure, the raw material purchase price of the cotton mill is now about 12% loss. "This is not the most important thing. What is even more troubling is that many garment enterprises are now starting to use chemical fibers instead of cotton yarns, and the demand for cotton yarn has been greatly reduced. Therefore, many mills are now in a state of limiting production and shutting down production." Ten thousand managers said.

The news from the Canton Fair this spring also showed that this year's clothing processing enterprises signed a bad situation, the number of orders reduced and mostly short. A large backlog of stocks has made cotton spinning enterprises overburdened. At the two three session of the China Cotton Association, Wang Gong, general manager of Anhui Huamao textile Limited by Share Ltd, mentioned in his speech that the sales situation of textile enterprises is not satisfactory in recent years, and the number of orders in the order is long and the number of products is slow. In addition, the inventory of textile enterprises is increasing. At present, the stock of some cotton spinning enterprises has reached 60 days' shipments, but under normal circumstances, this figure should be 15~20 days. Ren Xinpu believes that if the cotton market continues to show downtrend and the purchasing intention of downstream textile enterprises is enhanced, the current situation of cotton spinning enterprises may be improved.

Concerned about the future of production and demand relations

Analysts interviewed by our reporter believe that for the future trend of domestic cotton prices, we need to pay attention to two factors: output and downstream demand. In this planting year, the domestic cotton planting area has reached 81 million 500 thousand mu, an increase of 4 million 480 thousand mu over last year, an increase of about 5.8%, and a steady increase.

According to the May balance of supply and demand report released by the US Department of agriculture, in 2011~2010, China's main producers of cotton, such as India and Pakistan, will increase production. The world's output is expected to reach 124 million packages, or about 27 million 150 thousand tons, an increase of 10%. This figure has been refreshed since 1990s, and has a huge negative impact on cotton prices in the coming period. Affected by this, cotton contract prices fell significantly in 2012. {page_ Break}

In addition, the demand for the downstream market is still worrying. If demand can not be boosted, there is a further possibility of falling cotton prices. This spring seems to be a "bleak" order for textile enterprises. Only when autumn and winter clothing starts processing and production can cotton demand be pulled. At present, analysts generally agree that the 24000 yuan / ton is the bottom of the domestic cotton spot price. When the spot price is low to this level, there will be no further decline.