Monthly Report On Cotton Market 2011 August

The cooling of the global economy is still continuing.

Cotton prices continue to fall at home and abroad

Since mid July, the US credit rating has been downgraded, the market panic has heated up, commodity prices have fallen rapidly, and the difference between inside and outside cotton prices has narrowed.

In August 10th, the ICE cotton futures contract settlement price was 97.8 cents / pound, down 11.08 cents / pound, an increase of 20.55% compared with the same period last year. The international cotton index (M) was 128.93 cents / pound, down 32.49 cents / pound, or 20.13%, an increase of 41.15% over the previous year. According to the 1% tariff, the import cost of the folded renminbi was 21438 yuan / ton, which was higher than the domestic market price 2093 yuan / ton, narrowed the 1659 yuan / ton in the annulus, and the import cost of the folded renminbi was 2093 yuan / ton, which was higher than the domestic market price of RMB yuan / ton.

At home, cotton grew well in the main cotton producing areas in July. To meet the acquisition of new cotton, cotton enterprises actively sold to empty inventories, but the textile enterprises had tight funds and cautious purchase, and cotton prices continued to fall.

In August 10th, the settlement price of main cotton futures contract in China was 20630 yuan / ton, down 1835 yuan / ton, or 8.2%; the B index of the national cotton price on behalf of the 328 grade lint price in the mainland was 19345 yuan / ton, down 3584 yuan / ton.

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

According to statistics from the General Administration of customs, China imported 157 thousand and 100 tons of cotton in July, a decrease of 11 thousand and 800 tons compared with the same period last year, a decrease of 7%.

Insufficient demand for downstream demand

In July, China Federation of logistics and purchasing, China's Manufacturing Purchasing Managers Index, textile production index, new order index, employment index production index and main raw material inventory index were all below 50% critical points.

In addition, due to the long industrial chain, cotton prices, yarn prices, cloth prices have begun to fall sharply, clothing sales prices continue to rise, clothing prices in July rose by 2.2% over the same period, will further restrict the downstream consumption of textiles.

On the export side, the exchange rate of RMB against the US dollar has changed to a new high since the continuous exchange rate of foreign exchange. At present, it has exceeded 6.4. In addition, with the rising cost of domestic labor and other raw materials, textile prices are rising significantly, and export advantages will be further weakened.

According to customs data, the export volume of textile and clothing remained stable in July compared with the same period last year, but the contribution of price increase was greater. According to the calculation, 1~5 textile and clothing export price index increased by 21.49 points in the month of 1~5, and the textile export price index increased by 24.91 points, and the clothing export price index increased by 18.91 points.

Cotton prices have returned to a relatively reasonable price.

In the same period last year (2009/2010), domestic cotton prices are on the fast track. In this year (2010/2011), due to changes in the economic environment, several factors that are leading the trend of cotton prices are playing an opposite role in the same period last year.

The first is the financial and monetary environment.

Last year's global economic stimulus brought monetary policy.

The second is fundamentals.

In the previous year, the inventory was low at the beginning of the year, and the output and quality of new flowers were reduced due to the disastrous weather. The cotton market was postponed greatly, and the contradiction between supply and demand of cotton in a short time rapidly increased.

In the latter part of this year, domestic cotton supply tends to be loose, and new cotton is growing well, basically able to go public.

National cotton market monitoring system data show that since 2010, cotton sales progress has been lagging behind the normal year.

Before March 2011, the main reason for the slow sale of cotton was that the suppliers of cotton were reluctant to sell. After that, the demand for cotton was sluggish and the sales rate was slow. The cotton business inventories were significantly higher at the end of the year.

According to the International Cotton Advisory Committee (ICAC) and the national cotton market monitoring system data, cotton supply will be more relaxed in 2011, and the global cotton consumption will rise significantly.

The loosening of cotton supply will drive cotton prices to weaken.

The third is downstream demand.

Under the strong stimulus of the policy, the domestic textile industry was booming in 2010, and the good sales situation in the downstream provided strong support for cotton price.

This year's downstream demand has become a major factor in restraining the market. At the same time, it is difficult to eliminate the expected export tax rebate rate.

Under the above factors, the trend of cotton price decline in the new year is hard to change. Due to lack of policy support, the price of cotton will probably be much lower than domestic cotton prices.

However, from the following points of view, the domestic cotton price bubble has been digested to a certain extent in the short term, and the trend of rapid decline has basically been curbed.

First, state purchasing and storage is conducive to stabilizing cotton prices.

In August 4th, the relevant departments of the state carried out a study on the purchase and storage plan, and made clear that the new year's policy of 19800 yuan / ton at a predetermined price and opening and limiting the purchase and storage of new cotton would help to ensure the smooth link between the new and old cotton prices and slow down the cotton prices.

Second, textile industry's industrial inventories and finished goods inventories are decreasing.

According to the August China cotton industry inventory report, as of August 8th, the average daily use of cotton in the sample survey enterprises was about 32.7 days, a decrease of 5.4% compared to the same period, a decrease of 14.2% over the same period last year, a decrease of 4.2% over the average in the past three years.

In the past month, the sales rate of yarn and cloth in textile enterprises has been improved and inventory has decreased.

The yarn sales rate of textile enterprises was 91.5%, the annulus ratio increased by 2 percentage points, the number of days folded in stock was 24.8 days, the ring ratio was reduced by 0.2 days, the sales rate of cloth was 89.5%, the annulus ratio increased by 4.9 percentage points, the number of days of inventory discount was 45.8 days, and the ratio of annulus was reduced by 3.9 days.

Although yarn and cloth sales rate and finished product inventory are still not optimistic compared with the normal level in previous years, the decline in inventory level indicates that the tight state of enterprises may ease, and the purchasing motive is expected to be strengthened.

Third, China's cotton comprehensive price index and the price of raw grain purchase price have narrowed significantly.

As of August 8th, the price comparison between China's cotton comprehensive price index and the grain purchase price was 1.17, which was significantly narrowed compared with the highest price ratio of 1.97 in March, which is basically the same as that of 1.18 in the same period last year, indicating that cotton prices have basically returned to a relatively reasonable price range.