July Cotton Market: Textile Sales Are Not Smooth &Nbsp; Cotton Prices Continue To Go Down

Market review --

Cotton prices fell sharply at home and abroad

Cotton imports have decreased significantly.

Cotton price diving at home and abroad

Since mid June, the European Central Bank has increased interest rates.

At home, the survey in June showed that cotton grew well in the main producing areas of the country, and the pressure of "double knot zero" increased. The cotton enterprises actively sold, but the downstream sales were weak, and the procurement was scarce, and cotton prices fell sharply.

In July 11th, the settlement price of main cotton futures contract in China was 22465 yuan / ton, down 2125 yuan / ton, or 8.6%, up 37.9% compared with the same period last year. The national cotton price B index representing the mainland's 328 lint price was 22929 yuan / ton, a decrease of 1592 yuan / ton, or 6.5%, an increase of 24.8% over the same period.

In July 29th, the national cotton price B index, representing the average selling price of lint cotton in the mainland, was 20052 yuan / ton.

In June 2011, the import volume of cotton in China decreased significantly.

According to the statistics of the General Administration of customs, China imported 120 thousand tons of cotton in June, a decrease of 24 thousand and 600 tons from the previous month, a decrease of 16.98%, a decrease of 57 thousand and 200 tons and a decrease of 32.29% compared with the same period last year. In September 2010 ~2011, in June, China imported 2 million 212 thousand tons of cotton, an increase of 116 thousand and 200 tons compared with that of the previous year, an increase of 5.54%. In 2011 1~6, China imported a total of 1 million 327 thousand and 100 tons of cotton, a decrease of 218 thousand and 300 tons compared with that of the previous year.

Spinning output has increased.

In June 2011, China's spinning output increased.

According to the National Bureau of statistics, in June 2011, China's spinning output was 2 million 606 thousand tons, an increase of 308 thousand tons, an increase of 13.4%, an increase of 198 thousand tons, an increase of 8.2%.

In September 2010 ~2011 June, China's yarn production totaled 23 million 398 thousand tons, an increase of 10.7% over the same period last year.

2011 1~6 months, China

Market analysis --

Macro environmental situation is grim.

Cotton demand continues to slump

Inflationary pressures increase

The global economic outlook of the International Monetary Fund (IMF) in June predicts that the global economic growth rate will be 4.3% this year, down 0.8 percentage points from the previous year, which is expected to be 0.1 percentage points lower than in April.

Multinational purchasing managers' index of manufacturing in June has dropped sharply, and some countries have fallen below 50.

On 23 June, the Fed announced that the current federal fund rate for the maintenance of 0~0.25% remained unchanged, and the second round of quantitative easing policy ended in June 30th without new measures to stimulate the economy.

The Fed said inflation pressures in the US have risen and will focus closely on inflation in the future.

The EU and Japan's economic situation is also not optimistic.

Eurozone data show that this year 1~5 months, the euro area inflation rate continued to be higher than the European Central Bank set 2% inflation target, June

In June, China's consumer price index (CPI) rose to 6.4% year-on-year, and the domestic inflation situation became more and more serious.

The people's Bank of China has decided to raise the benchmark interest rate for one-year lending and lending of financial institutions by 0.25 percentage points since July 7, 2011.

This is the third time the central bank has increased interest rates this year.

Because of the tight capital, the interest rate of banks on small and medium enterprises has generally been above 30% of the benchmark interest rate this year.

At present, many enterprises that have difficulty in finished product inventory digestion and lack of liquidity are facing difficulties in raising financing difficulty and cost.

In June, the downward trend of economic growth was more obvious.

In June 2011, the China manufacturing and logistics purchasing management index (PMI) was 50.9%, down 1.1 percentage points in the annulus, and dropped for 3 consecutive months.

In the case of tight domestic policies, the tight capital chain and the sluggish production and marketing situation will continue.

Global cotton production increase in the new year

The sown area of cotton in 2011 increased by 25% over the same period last year.

The US Department of agriculture report shows that in 2011, the US cotton sown area was 83 million 379 thousand mu, an increase of 25% over the same period last year.

Among them, the sown area of upland cotton was 81 million 624 thousand mu, an increase of 25% over the same period last year, and the area of Pima cotton was 1 million 756 thousand mu, an increase of 42% over the same period last year.

India's new cotton export quotas began to be issued.

In June this year, the government of India decided to issue an additional 170 thousand tons of export quotas, stipulate that only in the last two years can the enterprises that export cotton fully comply with the government regulations apply for new quotas, and the enterprises that fail to ship the goods before September 15, 2011 will be fined 5 times the value of the goods.

In addition, the cotton sown area of India was 167 million 400 thousand mu this year, the highest record in history.

As of July 7th, the sown area of new cotton was 66 million 924 thousand mu, a decrease of 32% over the same period last year.

With the increase of monsoon rain, the seeding progress of cotton in later stage is expected to accelerate.

Australia cotton output is expected to record the highest next year.

The Australian Bureau of agricultural and resource economics and Statistics (ABARES) predicts that the cotton planting area will increase significantly in, and the cotton output per unit will be 133.6 kg / mu. The output will reach 1 million 100 thousand tons, which will once again refresh the record.

The weather in Turkey cotton area has improved and the total output is expected to increase.

The main cotton producing areas in Turkey continue to be sunny and hot. With the growth of cotton fields with too much earlier accumulation, if the dry weather continues, the cotton output per unit in Turkey in the new year is expected to be close to the highest record of 95 kg / mu in the previous year, and the total output will reach a record high.

Domestic cotton supply tends to be loose

Cotton sales remain slow this year.

According to the national cotton market monitoring system, as of July 8th, the sales rate of lint in the national processing enterprises was 81.1%, down 14 percentage points compared with the same period last year, which is 6.8 percentage points lower than that in the past 4 years.

Among them, the mainland sales rate of 74%, down 21 percentage points year-on-year, Xinjiang sales rate of 90.1%, down 5.1 percentage points.

According to the calculation of 6 million 231 thousand tons of output, the national total sales of 4 million 963 thousand tons of lint, a decrease of 1 million 449 thousand tons compared with the same period last year, is 1 million 217 thousand tons lower than that in the normal years of the past four years.

Cotton grows better in the new year.

The national cotton market monitoring system in the middle and late 6 months of the national cotton growth survey shows that since June, the main cotton producing areas in China are basically normal, with a slight occurrence of pests and diseases.

Affected by natural disasters such as drought and floods, the picking time of new cotton in the middle and lower reaches of the Yangtze River may be postponed, and the rest of the cotton area is basically normal, and some areas are slightly ahead of schedule.

If the weather is normal in the late period, it is estimated that the new cotton output will be increased by 93.06 kg / mu, 9.29% higher than that of last year, and the total output of cotton is expected to be 7 million 390 thousand and 200 tons, up 18.61% from the previous year.

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Forecast for future market

Insufficient demand power

Downward pressure on cotton prices remains

Market situation is hard to recover

From the domestic demand, export demand situation, capital chain situation, macroeconomic policy and other factors, the textile industry will face more severe challenges in the near future and in the future, and the demand for cotton will continue to slump.

There are signs that textile downstream demand continues to pick up momentum, and that it is still unable to rapidly digest upstream inventory and drive new production growth in the near future.

First, China's economy is heading for a soft landing. It is in the trend of high inflation and slow economic growth. The growth of social consumer demand is insufficient, especially clothing consumption. In June, the apparel consumer price index increased by 2.1%, representing a 12.3 percentage point lower than the 14.4% growth in the food consumption index over the same period.

Second, a series of measures to recover liquidity of the central bank have gradually worked, and bank credit has been tight and some enterprises have difficulty in financing.

The operation of textile industry is not good enough. The difficulty of obtaining bank loans has been increasing, which has seriously affected its purchasing intention and behavior.

Third, in the case of no significant increase in downstream consumer demand, even if the price of yarn and cloth is not enough, the high inventory of finished products will be difficult to digest in the short term.

The China cotton industry inventory survey report released by the national cotton market monitoring system showed that as of July 6th, the yarn production and sales rate was 89.5%, the stock was 25 days, an increase of 16.7 days compared to the same period, and the cloth production and sales rate was 84.6%. The stock was 49.7 days, an increase of 20.1 days compared with the same period last year, the highest level since November 2009.

High inventory of finished goods has occupied a large amount of capital, and the speed of capital turnover is slow, and the capital chain is tightened further.

In addition, to curb inflation, balance trade structure, increase imports and reduce domestic trade surplus is one of the important means.

In 2011 1~5, the textile trade surplus accounted for 357.74% of the total foreign trade surplus.

The Ministry of Finance announced that import tariffs on textile materials such as blended fabrics and linen yarns should be lowered in July 1st.

Regulating import tariffs is one of the ways to strengthen regulation in this area.

The pace of appreciation of the RMB against the US dollar has continued to accelerate and the export has been suppressed.

Since the people's Bank of China announced in June 19th last year to further push forward the RMB exchange rate reform, the central parity of the RMB against the US dollar has risen by 5.5%.

In the first 5 months of this year, the RMB appreciated by 2% against the US dollar. At this rate, the appreciation will reach 5% this year.

The appreciation of the renminbi has weakened the export competitiveness of textile products, resulting in the loss of some export orders.

Late purchasing faces pressure reduction

"China cotton industry inventory survey report" showed that as early as the beginning of July, the average daily use of cotton in textile enterprises was about 34.6 days, a decrease of 6.3% compared to the same period, a decrease of 11.4% compared with the same period last year. The textile industry's industrial inventories have declined for 3 consecutive months, but the enthusiasm for purchasing the enterprises is still low.

From historical data, textile industrial stock is usually on the down track at the end of the year.

In addition, the shortage of funds, the lack of start-up and the decline in the proportion of cotton used also limit purchases and the amount of cotton used.

According to the latest consumption forecast caution, the average monthly cotton consumption of textile enterprises is about 758 thousand tons, and the supply and demand of cotton generally tend to be balanced. It is noteworthy that the unfavorable factors in the current macro policy environment and the operation of the textile industry have not been released, so that the pressure on cotton prices to continue downward is still maintained.

First, the US second round of loose monetary policy ended on schedule, and domestic anti inflation efforts were not reduced.

Looking back at the beginning of this year, the main driving force behind the rise in cotton prices is not in the cotton market itself. The influx of peripheral capital into the domestic and foreign cotton market is the main reason for the rise of the market. At present, the global and domestic monetary environment has entered a contraction cycle, supporting the strength of cotton and other commodities.

Even if the latter part of the economy releases loose monetary policy again, it will not be able to play the role of the first round and the two round of loose monetary policy in the early stage of the first round and the second round of loose monetary policy.

Second, the estimated value of textile cotton decline is still conservative. In the last month's estimate, the cotton consumption decreased by 10% compared with the same period last year. However, from the June cotton textile situation, the decline continued to expand, to 13.2%, which was converted to 753 thousand tons.

For the above analysis, there is little possibility of improving cotton textile in the short term. If the decline of textile cotton continues to expand, there may be a situation of oversupply of cotton in the later stage.

Third, according to the current growth situation, cotton is expected to increase substantially in the new year.

The national cotton market monitoring system cotton growth survey shows that under the normal weather conditions in the late period, the cotton output in the new year is expected to reach 7 million 390 thousand tons, increasing production has become a universal market expectation, and the time of listing is probably earlier, which will further inhibit the formation of cotton price.