Zheng Cotton Continues To Fall, Focusing On Arbitrage Opportunities.

The picture shows the spot price trend of cotton in China.

In summary, the global cotton supply and demand in the new year will be better than this year, and the decrease in downstream consumer demand will further lead to a decline in cotton prices.

On the whole, as the new cotton market is approaching, the price of domestic cotton will fall further as time goes by.

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According to the report of the cotton seedling situation issued by the United States Department of agriculture in July 18th, by July 24th, all 15 cotton producing states began to bud, the average bud rate was 79%, 13 percentage points lower than the same period last year, 8 percentage points lower than the average of the last five years, of which Louisiana had reached 100%.

The average rate of bells is 46%, which is 10 percentage points lower than that of the same period last year, which is 3 percentage points lower than that of the last five years. Among them, Louisiana and Arkansas have the highest bells, reaching 92% and 84% respectively.

The overall seedling condition was basically the same as that of the previous week.

The excellent rate is only 4%, which is 15 percentage points less than the past year; the good rate is 25%, which is 24 percentage points lower than that of the junior year; the general rate is 30%, 6 percentage points higher than that of last year; the bad rate is 18%, which is 12 percentage points lower than that of last year; the rate of difference is 23%, compared with that of last year.

China Cotton Research Institute: cotton growth index of China in July

The cotton growth index (CCGI) in China was 109 in July and 24.2 per plant in the last year. Due to the low base year of last year, the growth of this year's seedlings was better than that of the same period last year, which is nearly 10%, which is similar to that of the whole year (97 8 years).

On the whole, the first is that the overall quality of the seedlings in July is good, the early growth, the steady growth, the large area of peach bearing, and the large number of peach in front of the peach. The high yield shelf is characterized by "normal weakness", and most of them are in the flowering season at the end of mid July.

Two, the pformation of three types of seedlings was accelerated, and the growth was strong and stable.

They include wheat and cotton, and cotton after wheat.

Three, most of the diseases and insect pests in China are relatively light, which do not cause great harm.

However, the middle reaches of the Yangtze River droughts rapidly and floods. In late June, the local "two wilt" outbreak and the partial bug bug caused the partial two generation of cotton bollworms in the Yellow River.

First half of 2011

According to the field investigation of China Cotton Textile Industry Association, entrepreneurs generally feel that the current difficulties are difficult to cope with during the financial crisis. There are many unfavorable factors and uncertainties in the market, which are difficult to grasp the market trend of the next step, financing difficulties, and tight liquidity of enterprises.

The instability of cotton prices is still the most important problem in the industry, and the decline of cotton grades is more serious.

The adjustment of cotton prices and the adjustment of macro policies such as money and industry have made enterprises more cautious in their orders, and even have to give up long lists and large orders.

The phenomenon of small and medium-sized enterprises shutting down is serious, including large enterprises, including the decline in operating rate.

At present, the main problems in the industry are as follows:

The price of cotton market is still unstable.

At present, the textile industry's demand for cotton in this year is in a weak state, and has yet to show signs of improvement.

The inventory of cotton sales enterprises is obvious, causing the market price to decline.

In the past month, the rate of decline has been relatively slow.

US cotton week contract volume continued negative.

Cotton spot market prices always lack strong support factors to stop or stabilize.

In the aspect of new cotton, US cotton is seriously affected by weather, and the anticipation of increasing production is questioned by the market.

But cotton production in other major cotton producing countries, including China, is better than last year.

The Fed said that if the economy deteriorates in the future, it will still consider injecting more money, and the European debt crisis will be reproduced.

Domestic inflation pressure has not been reduced, the intensity of governance has been strengthened, and the direction of price decline has remained unchanged, the market is more sensitive and fluctuates in a certain range.

Since July 1st, the state has lowered the import tax rate, which has accelerated the decline of Zheng cotton to a certain extent.

The operating capital and electricity consumption pressure continued to increase.

As of July 2011, China has raised interest rates three times and raised the deposit reserve rate for the six time. It has caused considerable financial pressure on textile enterprises, especially the pressure of capital chain of small and medium-sized enterprises.

Electricity shortage is another pressure facing enterprises.

The electricity consumption pressure is earlier than in previous years, and the NDRC has raised the price of industrial electricity, which has greatly increased the production cost of enterprises.

The import tax cut will aggravate the competition in the cotton spinning industry.

Recently, the relevant state departments have adjusted the import tariff rate of some commodities, including cotton blended fabric, and the impact on domestic raw material gauze Market will also gradually appear in the second half of the year.

First of all, the demand for raw materials for cotton in the domestic market has been reduced, making the fragile market in the fundamentals a short time to further suppress cotton prices and have a negative impact on the confidence of cotton consumption.

Secondly, the reduction of import tax is to reduce our direct demand for domestic cotton blended fabric market, or to aggravate competition in the cotton textile industry.

Cotton diving suit wait-and-see

Cotton prices, which once jumped to record highs this year, have fallen by 38% this month.

As the price of cotton can not be reflected in the retail price of textiles until the end of next spring, garment manufacturers are faced with the problem of price adjustment.

At the same time, cotton merchants also encountered a large number of orders to be canceled.

Cotton prices, which have jumped to record highs this spring, have fallen 38% so far this month, making the textile factory owners and garment producers angry.

By the end of next spring, the decline in cotton prices will not be reflected in the retail price of textiles.

But clothing companies will have to decide in the coming months whether they will keep the price of T-shirts and jeans at a higher level to increase their profit margins, or to lower prices to ease consumer spending.

Weaver group, which produces Lee and Wrangler jeans, hopes that the price can be maintained.

Wiseman said: "the ideal result is that we will be able to maintain the current price level and recover lost territory in gross margin."

According to cotton traders, many foreign textile mills that have purchased cotton during the rapid rise in cotton prices are now competing to cancel the contracts. They can no longer afford to pay the original price due to reduced demand.

The spinning mill that makes raw cotton into yarn is in a dilemma.

Jordan, chairman of EasternTradingCompany, a cotton trading company in Green, South Carolina?

Li said that because the price of yarn is more severe than cotton price, many spinning mills prefer to buy Yarn directly for textile mills.

As a result, Cotton Traders encountered a lot of cancellation of contracts. Even those who could not afford to pre determine cotton prices or no longer needed cotton or even default appeared in Indonesia and Bangladesh.

Li said, this is a great problem.