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State Purchase And Storage Difficult To Change Cotton Price Weakness

2011/10/12 15:34:00 19

State Purchase And Storage Of Cotton Price Weakness

Short term demand is hard to recover.

store up

Cotton prices still fall before and after the end.

In the fourth quarter of 2011, the supply of cotton market was not as good as demand, because in addition to the United States and abroad, the situation of cotton production in the world's major cotton producing countries was basically determined. Supply is no longer the main factor affecting cotton prices, and demand is the core of cotton price fluctuation.

Short term domestic cotton demand is hard to recover

Why is the trend of domestic cotton weak?

cotton

Where is the demand? I think the four reason is the reduction of terminal demand in Europe and the United States. The second is the pfer of orders for Chinese cotton textile exports, the third is replaced by chemical fibers, and the fourth is restricted by the tight capital chain.

The reason for the reduction in demand in Europe and the United States is its unsatisfactory macroeconomic situation. Behind the export order pfer of cotton textiles is the accelerated loss of competitiveness, the rising labor costs and the appreciation of the renminbi.

These two aspects are just the brutal realities that almost impossible to change in the one or two quarter.

This determines the demand for reduced demand in Europe and the United States and the market space occupied by Southeast Asian emerging market countries, which is difficult to recover in the short term.

The price difference between cotton and polyester has been gradually repaired along with the continuous reduction of cotton and polyester.

Falling down

Cotton polyester

The price difference will in turn weaken the substitution effect of polyester on lint, which is also conducive to the return of lint demand.

Judging from the index, the price difference between cotton and polyester has approached its equilibrium level since mid August, and the substitution effect of chemical fiber on cotton has weakened, and the demand of cotton that has been replaced by chemical fiber has basically had the premise of regression.

In the small and medium-sized enterprises in the majority of the cotton textile industry, capital chain tension has become an important factor restricting the release of demand.

Although the survival situation of small and medium-sized enterprises has attracted the attention of the central government, it is still a question mark whether the structural problems of SMEs' financing environment can be substantially changed.

With the reduction of domestic lint prices, although the demand for chemical fiber replacement is recovering, it is powerless to return to the sky. The weak demand for lint cotton is unlikely to change significantly in the fourth quarter.

Buying and storing will not change the general trend

It is undeniable that the purchase and storage is one of the themes of the fourth quarter of 2011 and the first quarter of 2012.

In the period of purchasing and storage, the profit space of the purchasing and processing industry is the direct factor determining its behavior.

In storage

Price

Under the established circumstances, seed cotton purchase price and processing cost are the two variables that affect their profit margins.

At the end of September, the cotton field survey organized by Zheng Shang found that

In recent years, as the cost of personnel wages, packaging materials and other costs have increased significantly, the acquisition and processing costs of cotton enterprises have also increased year by year.

In 2011, Dezhou's acquisition processing cost has risen to around 1000 yuan / ton, and the acquisition and processing cost in Xinjiang area is even as high as 1200 yuan / ton.

The only option for acquiring processors is to lower the purchase price of seed cotton, which will be affected by the reluctant sale of cotton farmers in the acquisition process.

At present, the situation of cotton purchasing and processing industry is rather awkward. It is on the edge of micro deficit or micro profit. Because of the worry about the late trend of cotton price, the acquisition is afraid to make money.

Cotton prices will fall.

If the price is at a current standstill, it is foreseeable that the state will collect and deposit the price.

cotton

The resources will be limited. Most of the cotton resources will remain in the hands of the cotton enterprises at the end of the purchase and storage. If the demand is still weak, the cotton price without support will be broken down.

If cotton prices fall again in the fourth quarter, the profit margins of cotton processing and purchasing enterprises can be guaranteed, and cotton enterprises will be able to earn profits. The state can also receive cotton as expected, which not only regulates the stock of cotton resources in the early market of 2011/2012, but also provides resources for future adjustment of cotton prices.

From the perspective of restoring the vitality of the cotton spinning industry chain, the early fall is better than the latter.

In the fourth quarter of 2011, the cotton market is hard to find much more news to boost cotton prices.

State purchasing and storage has a supporting role in cotton prices, but it can not fundamentally meet demand. In addition, the cotton purchasing and processing industry is facing an awkward situation. The spot price of domestic cotton will have a fall before or after the end of the purchase and storage.