Retrospect And Prospect Of Global And China'S Cotton Market

China is the largest in the world. Cotton production Country, Consuming country And the importing countries, most of which have been maintained for many years, but the future development may make some changes in the three three.

It is now the world's largest producer, accounting for about 30% of global output, but it is likely to be replaced by India in the next few years. At present, the cotton planting area in India is the largest in the world, and the yield per unit area is relatively high. management technique India will become the largest cotton producing country in the world.

China is a big textile country and the largest cotton consumer in the world, accounting for about 40% of the world's total. Although India's cotton demand ranks second in the world, it accounts for a small proportion, far less than China's demand. Therefore, the status of China's largest textile country and the largest consumer of cotton will not change.

The output of cotton in China is relatively stable, and the cultivated area is mainly based on the grain planting area, because the area of cultivation will not be greatly improved, so the output will not increase significantly. The textile industry has decided that the status of China's largest cotton consuming country will not change. Therefore, the status of China's largest importer of cotton will remain in the next few years.

This will make China more affected by the global cotton supply and demand and other global cotton producing policies.

Since China's accession to the WTO, the global textile quota has been liberalized. China's textile industry has developed rapidly, and the demand for textile industry and the import volume of cotton have increased substantially. Therefore, cotton imports in 05 and 06 have reached 4 million 140 thousand tons / cotton annually (cotton year: September to August next year). Later, with the emergence of some cotton substitutes, import demand was relatively stable, basically maintained at the level of about 200-300 tons. From the trend, the proportion of yarn products produced by global cotton is gradually narrowing.

China's main cotton importing countries are the United States, India, Uzbekistan and so on. The import volume from other countries is relatively stable. Therefore, we should pay special attention to the cotton production area, yield per unit area and output of the United States and India. These indicators will affect the availability of cotton in China.

1. Review of global and China's cotton market in 10/11

Cotton prices skyrocketed in 10/11, showing roller coaster prices. The cotton price index is the index reflecting the spot price of domestic cotton. From 99 years to now, the cotton price fluctuated for several years at around 13 thousand yuan, except for the previous year. During the 10 years, it was 17 thousand yuan at high time and 7000-8000 yuan at a low price. But 10 years of cotton prices broke the historical record, from the end of 09 to the beginning of 10, there has been a sharp rise. Cotton prices have risen from 16 thousand to 30 thousand, more than doubled. Meanwhile, futures have risen to around 34 thousand yuan. This increase is at a record high, but fluctuated from November to March and began a series of sharp decline in March. Now it has reached 19 thousand or below 20 thousand, although it has not yet returned to its original position, but it has recovered a lot.

Judging from the international cotton market, it has never seen such a big fluctuation before. Before the international cotton spot long-term average price was about 70 cents, when it was 911 high, it also exceeded 100 cents, but 10 futures also rose 70-80 cents to more than 200 cents, and spot prices also showed the same increase. At present, New York futures industry fell below 100 cents to 90 cents, and the sharp rise and fall is the global situation. {page_break}

While raw cotton has plummeted, cotton prices are also driven by raw material prices. According to the statistics of cotton information network, 32 yarn also went up and down sharply in 07 -11 September. Cotton and cotton yarns are on the same chain, and cotton yarn has gone through 26 thousand to 42 thousand, and has experienced a twists and turns in the middle, and has returned to around 27 thousand yuan. Whole chain There is no link to escape from the market.

Why is there a historical surge? There are mainly several reasons: 1) at the macro level, the global liquidity is adequate and the inflation expectations are increased; 2) the downstream consumption is restored, and the demand for the European and American markets is strong; 3) domestic and foreign cotton production is declining, stocks are low, and the proportion of high grade is decreasing; 4) the state reserves are low, the ability to control and control is weakened, and the anticipation is strengthened; 5) speculative capital flows into the commodity market, and cotton is favored.

In early March, the reasons for the collapse in late -8 month: 1) measures such as raising interest rates and raising standards were frequently introduced, and the tightening expectations were strong; 2) 19 thousand and 800 yuan, the introduction of the acquisition and storage plan - - exacerbating the market's lower expectations; 3) the growth of new cotton sowing in the northern hemisphere and the expected oversupply of the world; 4) the downstream consumption was not strong enough, the price was not smooth, the inventory of the textile enterprises was overloaded, and the downtime rate increased; 5) the capital chain was tight, and the end of the year was tied to zero pressure, and the repayment of loans became an important pressure.

At the beginning of the year, some people thought that the gap of cotton was rigid, but in fact, cotton was substitutable. When the rigidity gap reached a certain level, it turned to be elastic, so cotton price should return to reason.

2, 11/12 global and China Cotton Market Outlook

From the enhancement of the financial attributes of cotton, it is more closely affected by the macro and other situations. A few days ago, the Italy credit rating downgrade also led to the price limit of cotton on that day, so the stability of the global economy affected the fluctuation of cotton prices. At present, because of the shadow of the global economy, this has a certain impact on textile consumption. China is the largest exporter of textiles and clothing in the world. If the downstream demand of the western countries has an impact, it will directly affect the export of our textile and clothing products. Therefore, it is also necessary to pay attention to the economic situation of other countries.

Speaking from the domestic level, the absolute amount of China's economy is increasing, but the growth rate has also been reduced, which is also difficult to judge the rapid growth of domestic textile consumption. The textile industry is faced with several major pressures such as labor shortage, shortage of funds, and electricity shortage. Most textile and garment enterprises' profits, especially the added value of big road goods, are not high, and the profits of enterprises are relatively low. Among them, the most serious is labor shortage. As the population growth rate has declined, and the number of young and willing textile workers in 80 and 90 years is decreasing, compared with that of Southeast Asian countries such as Vietnam and Bangladesh, labor cost is relatively low, so the advantage of labor cost has gradually increased in his country, and China's advantages are more reflected in productivity. The same labor force, other countries are cheaper, but our efficiency will be higher, but the labor cost advantage is gradually losing, which is a great cost for textile enterprises. In addition, the shortage of funds. The recent tightening policy will not change significantly. For textile enterprises, capital is a very important issue. The cost of raising interest rates several times is very high, so many enterprises choose to borrow money from the private sector, increasing the cost of financing, and in the long run it has become a factor affecting prices. In the first half of the year, when prices fell sharply, the government was constantly raising interest rates. Some enterprises also had to repay loans at the end of the year. Many enterprises had to reluctantly sell some products such as cotton and cotton yarns at a low price. Therefore, capital will become an important factor affecting the price of cotton and cotton yarns at the stage. Secondly, in summer, many provinces will take measures to limit electricity. Textile enterprises have to cut down production and stop production. Some enterprises buy equipment such as generators themselves and increase their cost, so electricity consumption is also a problem. For export oriented enterprises, exchange rate is a special issue to consider. The RMB has been in the appreciation range, but the recent appreciation has accelerated. Now it has reached the position of about 6.37. Many textile enterprises feel that it may exceed 6.3 to 6.2, which has a considerable impact on the export of textile enterprises. Because of the appreciation expectation, enterprises will worry a lot about signing long lists and large bills. In addition, the reduction of export tax rebate rate is based on the premise that trade should be balanced and textile exports should not be the biggest economic stimulus, so we must balance foreign trade. At the same time, adjusting the structure of the textile industry is also one of the reasons for reducing the export tax rebate. Therefore, it is not necessary to protect the industry blindly, but to make the industry develop healthfully and eliminate some vulnerable enterprises. In the medium and long term, export tax rebates will be reduced. Only competitive enterprises will survive better. But in the near future, the reduction is unlikely, because the current situation of textile enterprises is very difficult.

From the cotton itself, if the cotton price in October did not show obvious natural disasters, the supply and demand of global cotton in 11/12 would be relatively loose, which could be said to be a situation of oversupply. According to the US Department of agriculture's global view, the world's cotton output has increased by 7.3% over the past year, the total volume of about 26000000 tons, the consumption is only about 25000000 tons, and the output is larger than that of the sales. Therefore, the supply of cotton resources is quite abundant next year. The global cotton growing area is only affected by severe drought in the United States and Texas. It is a reduction in production (planting area is increasing). If the United States does not cut production, the supply will be more abundant. India's cotton is more than 6 million tons, which is also a breakthrough in the historical record. This year, India cotton has completely liberalized its export because of its high yield. (last year, India restricted exports, so some of its resources did not enter the market), and there was no quota restriction. Therefore, the proportion of imported cotton in India is expected to increase this year. India cotton prices will have an impact on global cotton and Chinese cotton prices, because India cotton is cheaper than other cotton.

Global consumption depends on the stability of the global economy. At present, it is cautiously optimistic. Domestic output is also increasing. The cotton information network was released in early September. It is expected that China's cotton output will increase by more than 15% this year. However, the scale of 7 million 400 thousand tons will take into account the recent rainy days in the Yellow River basin, which will lead to the opening of cotton bolls. In October, it will be slightly reduced to 720-730 million tons. In addition, Xinjiang's output is also good this year. Xinjiang's output accounts for 30-40% share of the whole country. So the good harvest and good quality of Xinjiang cotton will provide a good guarantee for the country's resources. It is estimated that Xinjiang cotton will reach 3 million 500 thousand tons this year. {page_break}

From the demand situation, exports in the first half of this year are increasing year by year, and the ring ratio has been increasing. But in August, the ring ratio has slipped, because the textile industry is still lagging behind, and the textile industry is still facing certain difficulties. The growth in the first few months is not a good export situation. There are other reasons. The increase in export volume is mainly from the price, not the quantity growth. Therefore, the overall situation is not as good as the data show, and the price rise is not from the demand side, which makes the rise of raw materials rising passively, which leads to the most enterprises' profit is tight. From the demand of products, cotton textiles are decreasing, and the substitution of chemical fiber products will increase obviously. This shows that textile enterprises have not yet fully recovered, and the situation of shutting down and reducing production has not been completely reversed, because there is no obvious change in downstream consumption. The weakening of downstream demand led to the original rigid gap turned into an elastic gap, and the stock of cotton yarn and grey fabric increased. The first half of the year was basically in the process of de stocking. Cotton consumption in the second half of this year will basically remain stable, and there will not be a significant increase, so the domestic demand for cotton is up to about 10 million tons.

Although consumption is stable, there is still demand for imports because of limited output. This calls for attention to the price of cotton in the world's exporters, that is, the difference between cotton prices at home and abroad. China's cotton has a high cost price and is the highest in the world, but last year it was a bit unusual. International cotton has been higher than domestic for some time. Now it is gradually returning to the inside and outside spreads. When the price is right, China can supplement its resources by importing and reduce its cost. China's import cotton market is liberalized, but it is not completely free and has quotas, so the quota quota and allocation schedule will affect the pace of cotton imports. When the quota is insufficient or can not meet the needs of stages, the demand for cotton will also be affected.

　　 3. Cotton in the current year Purchasing and storage policy Impact on the market

At present, the market is more concerned about the cotton purchase and storage policy. In March this year, it announced the new policy of collecting and storing the new year. This is the first time in history that the policy of purchasing and storing has been announced in advance. You may not care much about the details, but the price is still very sensitive. What is the concept of 19 thousand and 800 yuan for storage and purchase price? (the establishment of the storage price is based on the proportion of grain and cotton at 1:10) - the price of the lint to the Treasury (the price to be sent to the storage depot) rather than the cost price. Therefore, the cost price of the enterprise must be lower than the price of the warehouse, and it will be profitable to the library. On the psychological level, this has a certain effect on the market price.

In previous years, there were still some restrictions on the storage capacity, but this year the state is not limited, so long as the enterprise feels profitable or bearish, it can pay. But in fact, since the start of September 8th, there has been no one ton turnover, no one is willing to sell, this is mainly because new cotton has not been listed in large quantities, there is a certain difference in price, some enterprises have reached 20 thousand of the cost price, and they will lose money when they are handed in. Of course, although there is no deal, but the purchase and storage price for the market still has a bottom effect, and now cotton prices do not continue to explore again.

But there is also an effective period for storage and purchase, from September 1st to March 31st. In the case of listing, the final output, 4) quotas (5), and 5) the policy of collecting and storing the stocks has a deadline. After the end of March 31st, the recovery will be seen. If the recovery is not available, the resources of the harvest will be larger in the hands of the cotton traders, and the spot market will be larger. If it is collected, the state control power will increase. So, overall, the possibility of cotton inflation is not very large this year. But in March, we need to pay attention to the policy of purchasing and storing the next year. The storage price is formulated according to the ratio of grain and cotton. From the perspective of the policy trend, we should protect the grain and stabilize the cotton. Therefore, it is expected that the proportion will be kept at 1:10 in the future, and it will remain at the ratio of 1:10, which will not be lower than 19 thousand and 800 yuan. Therefore, the cotton entering the 20 thousand era is the general trend. Therefore, the main concerns are: 1) the weather in the next 1 months (at present the world is full of harvest); 2) the impact of the global economic situation on consumption; 3) a large quantity of new cotton in November.