Give Cotton Pricing Power To The US?

If this continues, China's cotton will also follow the steps of corn and soybeans and be controlled by the United States.

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In Jiangxi, the cotton fields in September were still green and decorated with white flowers.

Part of the early maturing cotton is now in full bloom, and cotton growers are busy picking up these cottons.

Jin Qihua, a villager in Da Fan Village, has planted 15 mu of cotton this year. He is preparing for the cotton harvest season. Although the growth of cotton is better than that of last year, he is somewhat unhappy.

Seed cotton has been bought, but

Not only is Jin Qihua, but the local villagers are in the doldrums.

If we lose, we will lose.

Last year, the highest purchase price of seed cotton rose to 7 yuan per catty, and the cotton price of the bumper harvest doubled the price of cotton farmers. Many villagers increased their planting area this year, and some young people working abroad also chose to stay home and grow cotton.

Although the price of agricultural materials has soared since the beginning of spring, farmers have to use the best fertilizer for cotton fields.

"Last year imported fertilizer 150 yuan a pack, this year rose to 180, the cost of pesticide and fertilizer in an acre field is at least 460 yuan. When there is no insect disaster, it is estimated that we can receive more than 500 Jin of cotton."

Jin Qihua said, according to last year's market, such investment is worth it.

Last year, Jin started 15 acres of farmland and collected 8700 Jin of cotton, which sold more than 40000 yuan in total.

"If it is estimated at this price, it can only be sold for more than 20000 yuan."

Jin Qihua said.

The rise and fall of cotton prices is not the first time.

But to Jin Qihua's frustration, even though cotton prices were high last year, he lost money because he had another status: Cotton Traders.

In Dean County, cotton farmers sold cotton to the country in the past, but after the abolition of the cotton purchase, cotton farmers could only sell cotton to the cotton traders at home.

"Instead of selling to others, it's better to change hands" and think that if there is a profit, after a certain amount of funds, many local cotton farmers are also on the way to cotton harvest.

In the village of hundreds of households in Da Fan, there are more than ten temporary cooperative organizations. Each organization raises unequal amounts of money, and new cotton goes public, and they will be dispatched on time.

Last year, Kim Chin Hua and 3 villagers invested a total of about 1000000 capital.

"At the highest time, our purchase price reached 6.7 yuan, a total of sixty thousand or seventy thousand jin."

He said.

If sold by lint cotton, it could be sold for 27500 yuan at the time, and it would make 10 Fen if it was 6.8 yuan per catty.

But Jin Qihua, who has many years of acquisition experience, thinks that cotton prices are rising in the first half of the year, so there is no rush to sell.

But by March, the price of cotton was like a roller coaster, and the high platform plunged from 31000 yuan per ton to 24000 yuan per ton. After that, it stumbled into the current 19000 yuan per ton and fell to 17000 yuan per ton.

"Last year cotton could earn 1000 yuan in a warehouse for one night, and it will cost thousands of dollars to sleep in the warehouse this year."

Jin Qihua said with deep feeling, but looking at the falling of cotton, he could do nothing but to be unlucky.

Before the Dragon Boat Festival, Jin Qihua could only reluctantly deliver the goods, and cotton prices were already miserable.

"A total of about four hundred thousand jin of cotton lost 360 thousand, and I lost more than 80 thousand of my own. The more than 40 thousand yuan of cotton sold at home is not enough to add to this hole."

Guess the supply and demand by luck

Jin Qihua is just one of the cases of losing cotton.

In many parts of China, cotton merchants and cotton traders are kept behind the door, and any change in the market will become a huge risk of pportation costs, cotton plant start-up, weather and foreign orders, making cotton as unsafe as gambling.

When Jin Qihua and others were hoarding cotton, they did not realize that this year China's textile industry is experiencing a "catastrophe", and there are more and more enterprises unable to start.

This year's textile industry is very unusual.

Field investigation of cotton producers in Shandong showed that 30% to 40% of the textile enterprises in Dezhou area had ceased production, and 80% to 90% of the textile enterprises totally limited production, the source said. "The industry generally judges that the difficulty of the textile industry even exceeds that of the 2008 financial crisis."

Dezhou, Shandong, is not only a big cotton producing city, but also a big textile city. It is a weathervane of the cotton market.

A direct consequence of the suspension of production and production of textile industry is the stagnation of procurement, the lack of orders for cotton yarn enterprises, high inventory and tight funds.

In some parts of Shandong, the price of yarn trading has dropped by several thousand yuan per ton, because cotton mills are eager to return the funds.

Previously, cotton prices rose generally, and domestic demand was greatly inhibited by the soaring cotton prices.

In Europe and America, which is deeply in debt crisis, demand is still weak.

According to customs data, China's clothing exports grew by more than 20% over the first half of the year, but Wang Qianjin, the first textile network analyst, said that this is actually a nominal increase in the price increase. The actual export volume in the first half of this year increased by about 2%.

Weak exports, sluggish domestic demand, and a depression in the upstream and downstream textile industries explain why China's cotton prices will plummet in such a sluggish season in 6~8.

Wang Qianjin said in an interview that cotton prices fell to 25 thousand yuan / ton from the high price of 30 thousand yuan / ton. The market generally believed that the departure of hot money led to such a result. However, after falling again and again until the protection price of the government set below 19800 yuan / ton, it was necessary to comb the supply and demand factors of the cotton market itself.

But these information and analysis are obviously unconsciousness and ability to collect and obtain for farmers like Jin Qihua.

"They can only guess by luck whether the cotton is going to boom or fall."

Liu Junluo, a private economist, was very sympathetic to the experience of villagers in Da Fan. He said in an interview that Chinese cotton growers had no national protection mechanism, nor did they understand futures hedging, leading to the situation of "losing money or losing money".

Traders scrambled for cotton futures

In the face of the depressed market, in September 1st, the national cotton purchase and storage plan was formally implemented. The State Reserve will open the "unlimited quantity" purchase of new cotton at the price of 19800 yuan / ton. This is the first time that the state has opened the store at the lowest protective price, and China has put cotton into the cash crop.

"19800 yuan / ton is the price most likely to reach agreement on the upper and lower reaches.

For upstream suppliers, this price can protect the interests of cotton farmers, and also enable middlemen to maintain basic operations.

Sun Liwu, an information cotton analyst at Zhuo Chuang, believes that the policy is mainly aimed at protecting the interests of cotton farmers.

According to the current purchase price of 19800 yuan, the corresponding seed cotton purchase price is about 4.2 yuan per catty.

According to the estimate of villagers in Da Fan Village, when seed cotton purchase price reaches 4 yuan per catty, the income of seed cotton and grain is flat.

And seed cotton purchase price if less than 4 yuan / Jin, cotton seed will not be cost-effective, it will hurt cotton farmers' enthusiasm for cotton planting next year, the next year's cotton planting area may be reduced.

Even if cotton growers escaped this year, cotton cultivation in the future is still unoptimistic: the cost of cotton planting has been increasing in recent years, but the subsidy for good varieties has not changed for many years.

In the village of Da Fan Village, the final subsidy for an acre cotton field is only 15 yuan.

Compared with the embarrassing situation of cotton growers in China, American cotton growers appear carefree: they will not worry about not selling cotton, nor worry about the ups and downs of prices.

The US agriculture act 1933 established the cotton subsidy policy. In 2002, the agricultural bill further established export subsidies and restrictive subsidies.

The United States has also set up anti crisis subsidies for cotton farmers and subsidized cotton sales in the United States.

The subsidy rate is as high as 89%, that is, the Cotton Subsidy of US $89 per 100 US dollars. Besides, cotton farmers can also borrow futures to ensure profits.

Liu Junluo introduced cotton growers to form cotton farmers cooperatives and sold cotton to cotton farmers' cooperatives at harvest time.

The cotton growers' cooperatives participate in futures market hedging in their own name, and sell relative contracts in futures market while signing sales contracts with traders, so as to prevent the risk of downward price of cotton and effectively lock sales profits.

"China's situation is that in the boom and fall of cotton futures, only futures traders who specializes in futures futures make money and have nothing to do with Chinese cotton growers.

Due to information asymmetry, China's cotton farmers are not only constrained by weather, but also passively participate in the globalized cotton boom and fall and can not control their own destiny.

Liu Junluo said.

Fluctuations in the US Department of Agriculture

"The United States has a full range of cotton related industries to protect, and the US cotton industry will not jump out of trouble at the turning point of the economic development of the United States."

Liu Junluo said, not only that, the United States relies on futures and subsidies policy to grasp the right to life and death of the world's cotton, and can choose the right time to strike accurately according to the long-term strategic needs of the United States.

For example, the soaring price of cotton in the last round came from the US Department of agriculture.

"In recent years, the highest output of cotton in China is less than 7 million tons, but the United States Department of agriculture actually predicted that China's cotton output in 2010 would be 7 million 180 thousand tons."

Dong Shuangwei, manager of the futures research and development center, once pointed out.

Liu Junluo told reporters that when the cotton was ready for planting, the US Department of agriculture first released the news to reduce the expected supply and demand ratio, to lower the cotton price expectation, so that Chinese cotton farmers could not dare to make a variety of things. The enterprises were also bold and bold not to store cotton, save the warehousing costs and prevent excessive cotton harvest.

And when the cotton market is ready to go public, a lot of good news is released. It is said that there is a big gap between actual output and expectations, and the demand is higher than expected, causing cotton prices to rise.

Last August, the US Department of Agriculture said in its monthly report on supply and demand forecast that China's 7 million 180 thousand tons of cotton production could not be achieved for various reasons.

At the same time, the global 2010/11 cotton inventory decreased to 45 million 610 thousand bales at the end of the year (1 bales of 500 pounds), and cotton consumption increased from 119 million 700 thousand packages to 120 million 870 thousand packs.

The subtle changes in growth have helped boost cotton prices.

Since then, faced with the shortfall of cotton in China, the national cotton Commission (CCI) has enthusiastically expressed to China that it will "provide high-quality cotton in time".

As a result, cotton prices were high last year, and cotton growers in the United States were making full profits.

China, the world's largest cotton producer, is cutting its cotton growing area.

From 2008 to 2010, the national cotton planting area has been reduced by about 14 million mu.

Liu Junluo believes that if the industrial chain of China's textile industry is so broken, the US cotton is squeezed in, which is undoubtedly the opportunity for the United States to take advantage of it.

If China does not attach importance to subsidizing and supporting cotton farmers, China's dependence on foreign cotton will be further deepened.

China's cotton will also follow the steps of corn and soybeans and be controlled by the United States.

The pfer of pricing power to the US cotton growers is very dangerous for China, a big agricultural country with manufacturing as its lifeline.